In the editorial “Happy New Year?”, J.F. Orth, Cologne, addresses the current dramatic situation in the world, namely war and pandemic and their influences on sports law. The pandemic had been dealt with in a goal-oriented manner by the clubs, courts and lawyers involved. What has not been decided, however, is the further exclusion of Russian athletes and teams from major events on the world sporting stage. In the author’s opinion, this is also connected to the coquetry of the leadership in the sports federations.
On the other hand, the upcoming disputes in the new year are exciting, e.g. the decision of the ECJ in the SuperLeague and ISU cases, the opinion of Advocate General Rantos with his progressive assessments (see in this issue) make one sit up and take notice. No sports law expert will be able to underestimate the BGH’s further examination of national cartel law in sport (also in this issue).
In the article “Article 165 TFEU as Constitutional Recognition of the European Sports Model: Fundamentals and Consequences”, B. Schiffbauer, Rostock, discusses the basic thesis of the opinion of the Advocate General at the ECJ of 15.12.22 in the European Super League case.
This thesis has not only richly endowed the monolithically organized sports associations in Europe, but has also decisively strengthened Art. 165 TFEU, which was not particularly meaningful regarding sport, but has also produced legal-theoretical, dogmatic and sports-practical consequences.
At the outset, the author points to the mechanisms in state constitutions and international law and also to the firmly anchored one-place principle in the law of national and international federations, which serve to protect the existing system. After describing the well-known case of the European Super League, the author introduces the evaluation by the Advocate General, who sees a “constitutional recognition of the European sports model” from Art. 165 TFEU.
This thesis is based on the statements in Article 165 TFEU on sport and education policy, which result from paragraphs 1 and 2, seventh indent, and paragraph 3. This results in the key concept of the European dimension of sport, which has slowly gained more and more contour in the case law of the ECJ.
In the following explanation of the thesis on the constitutional recognition of the European model of sport by Advocate General Rantos, he first refers in his “Preliminary Observations” to the sport policy statements in the Treaty of Lisbon and to the fundamental statements in the Bosman case of 1990. From this, Rantos deduces the material core of the European sport model, which is composed of a triad of three components: 1. the pyramid-like association structure from the professional world association to the domestic district association, 2. the openness of sports competitions organised by associations and 3. the financial solidarity within the pyramid.
This de facto actual state of sports associationism in Europe, as assumed by Advocate General Rantos, is drawn from Art. 165 TFEU and the statements there on sport, which is why these three components of the European sports model mentioned above have constitutional status within the Union legal order.
The author further deals in detail with the legal-theoretical consequences of this thesis of Rantos, namely the ground of validity of the norms in Europe, as well as the legal order of associations and the autonomy of the legal order of associations and federations, as well as the extension of the legal order of the Union to geographical Europe. According to the thesis on the constitutional recognition of the European sports model, the sports-related triad of Art. 165 TFEU guarantees the material core of this model, consisting of the three core components “pyramid-like association structure”, “openness of sports competitions organized by associations” and “financial solidarity”. Thus, first of all, a general norm hierarchical basic statement is made. All of these regulatory elements belong to Union constitutional law, i.e. they are on the highest hierarchical level of the Union legal order and are thus to be classified as being of equal rank to the other objectives of the Union and the fundamental freedoms.
Finally, the practical effects on sports associations are also important, because they have a considerable impact on their practical field of action. It is not only the thesis on the constitutional recognition of the European model of sport that forms a basis for this, but it concretizes and steers the practice of sports associations to an increased degree.
In an outlook, the author points out that this view on the constitutional recognition of the European model of sport is initially only a thesis. Although it comes from a respected Advocate General at the ECJ and refers to the sports-related triad in Art. 165 TFEU, it must first prove itself in the complicated acquis of the legal order network of supranational and national elements. A number of questions remain open here. In any case, Advocate General Rantos has inspired European sports law scholarship to no small extent.
In the article “Skill competitions between a public promise and a game”, M. Castendiek, Cologne, deals with the legal classification of skill competitions, which lie on the borderline between a legally binding public promise and a non-binding game. As a result, competitions such as shooting championships, skittles rounds and the like are on the borderline between a game contract (§ 762 BGB) and a public offer (§ 657 BGB), but also in the form of a prize competition (§ 661 BGB) – only in the latter case can actionable claims arise. Participants in these competitions or in sports festivals usually pay a contribution, which is then used by the organizer to finance prizes, cups and certificates.
The author first examines the prerequisites of the gaming contract, which always presupposes an element of uncertainty. Sporting competitions can also be classified as gaming contracts due to their aleatory element. The criteria for the assumption of a gaming contract are the serious economic purpose and always a situation of danger typical of gaming; both sides must have an intention to gamble and a risk of loss, whereby this may depend on physical and mental abilities as well as on chance.
In contrast, the prerequisites of the public promise are only a unilateral possibility of loss, which also only requires a unilateral declaration of intent that is not subject to receipt. In the case of a public promise, the obligation to pay the prize exists when the act to be performed has actually taken place. In this case, the sports festival under review is not organized in a purely unilateral manner, since the participants are obliged to pay an entry fee. In this respect, the preliminary result of the author’s investigation is that a sports festival does not constitute a public promise in the sense of § 657 BGB. However, it is also not a game, since the value of the non-cash prizes given out is less than the entry fee and thus there is no risk of loss for the organizer.
The author examines how to deal with this regulatory gap that has arisen, raising the question of the extent to which it is possible to preserve the uniform wording within § 657 BGB, and therefore comes to the conclusion that a sports festival is to be qualified as a competition within the meaning of § 657 BGB. Such events with a participation fee do not preclude qualification as a sweepstake in the form of a prize competition (§ 661 BGB), provided that the participation fee merely compensates for processing costs or does not ward off seriously interested parties.
For the organizers of sports festivals, this brings the good news that if the participation fee is only used for the purchase of cups, medals and certificates, the qualification as a sweepstake of §§ 657 ff. BGB (German Civil Code) and the organizer is thus entitled to an actionable claim for any non-payment of participation fees.
In the article “Money Laundering Regulations and Risks in Football“, D. Schmedding and L. Olschweski, Cologne, describe the current state of defense measures against money laundering in professional football.
The need for regulations to prevent money laundering was recognized as early as the beginning of the 2000s, and the Financial Action Task Force (FATF) in particular has prepared studies and presented recommendations. Despite the known problems, there are hardly any legal regulations so far, which is why the federal state of Bremen is now trying to include professional sport in the scope of the Money Laundering Act (GwG) through a legislative initiative in the Bundesrat. Likewise, the EU is planning to introduce certain measures into professional sport through regulations. First, the authors describe the legislative initiative of the Federal State of Bremen and the EU. Money laundering is the concealment of the origin of funds from criminal offences so that they can be regularly used in the economic cycle without a connection to the predicate criminal offence being established. The prevention of money laundering is a state task. The state obliges economic operators to take preventive measures, also on the basis of certain EU directives. Since 1990, credit institutions have been so-called obligated parties under Section 2 of the Money Laundering Act ( GwG), which must take action alongside other economic operators, such as lawyers.
On 26.01.2022, the Federal State of Bremen submitted a legislative proposal to include professional sports in the obligated circle of the AMLA. The federal state of Berlin has joined the motion. In October 2022, the Bundesrat rejected this motion. However, it is to be pursued further. Likewise, the issue continues to be addressed at the EU level.
The authors refer to previous initiatives and studies on money laundering prevention in sport, in particular the EU White Paper on Sport mentions this. The measures taken by FIFA and UEFA should also be mentioned.
In Germany, the Federal Ministry of Finance has dealt with a risk analysis within the framework of § 5 GwG, but comes to the conclusion that the risk of money laundering in professional sport is not to be considered so high. However, in view of the growing importance of sport and the increased use of the sport sector by organised crime, a stronger initiative is necessary. The authors go on to describe various money laundering typologies in football, mentioning in particular money laundering in club investments, player transfers and the involvement of advisors, player agents and other third parties. The FATF and the EU see a high risk of money laundering in this area.
Overall, a concrete implementation of money laundering prevention in football can only be achieved by including professional clubs and player advisors in the obligated circle of the AMLA. They must be subjected to the legal requirements with regard to the other due diligence obligations on transaction checks and business partner checks. This can be done in detail in several steps, starting with risk management according to the already existing regulation in §§ 4 and 6 AMLA, further through other due diligence obligations according to § 11 AMLA as well as through a reporting obligation according to § 43 AMLA.
In their conclusion and outlook, the authors once again point out the risks of money laundering and the recommendations of the FATF and call for further activities by the legislator, which should have been carried out long ago, and condemn the omission so far, which can only be explained with a conscious turning away due to the popularity of football.
M. Stahm, Dortmund, deals in his article “The case of Marin Pongracic” with the problem of a claim for a bonus by a professional footballer who has been refused a bonus by his employer and who is now being also refused further appearances in matches because of a lawsuit that is currently pending.
By way of introduction, the author describes the case of Pongracic, a professional footballer of VfL Wolfsburg, who is in litigation against his club because of the unpaid bonus, which would have been payable in addition to his fixed salary. The club’s coach has stated that Pongracic will not be able to play in the club’s matches in the future until he withdraws his lawsuit against the club. The player here is claiming a bonus of € 250,000.00 for the club’s qualification to the Champions League on the basis of a fourth place finish in the pre-season table, while the player was on loan to another club at the time. Accordingly, this dispute has two points of contention, namely the premium not received for the past and, for the future, the lost deployment premiums due to the football coach’s statement that he did not want to deploy the player.
The author first explains in detail the labour law agreements of professional footballers and the individual bonuses, namely for use, match winnings, point wins as well as placings and title wins according to the established case law of the Federal Labour Court on the basis of § 611 a para. 2 BGB.
The player Pongracic had thus been loaned out many times and, in the author’s opinion, would have had to play a total of four compulsory matches in order to benefit from the bonus; in this respect, at first glance, the player does not appear to be entitled to a bonus. Accordingly, the only further question to be examined is whether the player has any claims due to a non-assignment as a result of pending court proceedings and the statement of the club’s coach. The author clarifies and explains in detail that obviously extraneous reasons are decisive here for the non-assignment in the future. At most, the club could have to argue and prove in the proceedings that the non-assignment was solely for sporting and tactical reasons, whereas the player would again have to prove that the non-assignment was based on extraneous considerations. A violation of § 15 of the General Equal Treatment Act (AGG) must also be examined. The author is inclined to think that here too, depending on the evidence, a claim for damages could be given. The Labour Court’s decision can therefore be looked at with great attention.
The article “Financial Fairplay and Financial Sustainability – a Reassessment” by J. Eh, Göttingen, deals with the system of “financial sustainability” introduced by the UEFA Executive Committee on 7 April 2022 as a successor regulation to Financial Fair Play (FFP). The latter had been repeatedly classified as inadmissible. In the author’s opinion, the problems of the FFP regulations were predominantly based on a faulty understanding of the FFP’s objectives. Although the FFP was not suitable for solving the problems of European club football in the future and the introduction of the new system of financial sustainability was necessary, the author compares both systems and concludes by asking whether the new system can solve the problems.
The new system states that no more than 70% of revenue may be spent on squad costs (salaries, transfer fees, etc.). This 70 % threshold is to take place over a period of three years. The criticism of the FFP regulations is well known. No financial restrictions could be imposed on rich investors due to inadequate enforcement mechanisms. In addition, the FFP regulations were seen as a restriction of fundamental freedoms (Art. 45, 56, 63 TFEU) and a violation of EU antitrust law (Art. 101, 102 TFEU).
The author first deals with the misunderstandings of the FFP regulations. However, in his opinion, this was not the decisive objective of the FFP regulations, but rather to secure the existence of the UEFA club competitions. Avoiding the insolvency of numerous top clubs of the UEFA club competitions from Italy, Spain and England had been the main objective of the FFP regulations. The author further deals with the final assessment of the FFP regulations under Union law, first also with the break-even provision in the starting point and then with the free movement of workers in Art. 45 TFEU and the freedom to provide services in Art. 56 TFEU, as well as likewise with the free movement of capital in Art. 63 TFEU and the prohibition of cartels in Art. 101 TFEU. Both allegations, the restriction as well as the violation of EU antitrust law, are to be regarded as unjustified in the opinion of the author. In his opinion, the FFP regulations in their break-even cannot be objected to. The author continues to focus on the problems of the lack of balance in the competition, the constantly increasing salary and transfer sums as well as the economic dominance of the individual clubs and finally comes to the conclusion that the new system brings with it some very positive innovations which could probably solve the biggest problems of European club football, however, the enforcement of the regulations, which have been in force since June 2022, still remains open.
ECJ, Judg. v. 10.11.2022, Ref. C 211/20 P (final).
No unlawful aid by granting a guarantee
Art. 107, 108, 256 TFEU
- The term ‘aid’ within the meaning of Article 107(1) TFEU does not apply to measures taken from State resources in favor of an undertaking if that undertaking could have obtained the same advantage in circumstances corresponding to normal market conditions.
- Where State aid is suspected of being incompatible with the internal market, it is for the Commission to prove, in particular in the light of the information provided by the Member State concerned, that the conditions for the application of the ‘private economic operator principle’ are not met, so that the State measure in question involves an advantage within the meaning of Article 107(1) TFEU. (editor’s guidelines)
ECJ, Judg. v. 7.12.2022, Ref. T-747/21 (not final).
Use of the EU word mark Fohlenelf
Art. 58, para. 1 lit. A, Art. 94(1), Art. 97(1)(d) of Regulation (EU) 2017/1001
1. When proving the use of a trademark by a football club which is very well-known in Germany, it must be assumed that the core product range offered in the fan catalogues submitted for the relevant period is actually sold.
2. Proof of genuine use of the contested mark Fohlenelf is possible on the basis of an overall assessment for those goods which regularly appear in the catalogues covering a not insignificant part of the relevant period.
3. The meaning of the German expression “Älteste Fohlenelf der Welt” (“Oldest Foal Team in the World”) affixed to a beer barrel implies that there are several “Foal Team” (“Fohlenelf”) teams whereby the challenged mark loses its distinctiveness, and its distinctive character is altered. (Guiding principles of the SpuRt editorial office)
ECJ (Advocate General Rantos), Opinion v. 15.12.2022, Case C 124/21 P (International Skating Union ./. European Commission)
Compatibility of association approval reservations with threat of sanctions with EU antitrust law (ISU case)
Art. 101, 102 TFEU
1. Although the rules and regulations of leading sports federations are covered by EU competition law, not every restriction of competition for which they are responsible automatically constitutes a violation of Article 101 (1) TFEU. Rather, each measure must be assessed in its overall context on the basis of its objective.
2. The simultaneous exercise of regulatory and entrepreneurial functions by one and the same sports association does not necessarily result in a violation of EU competition law nor in the necessity of functional unbundling. Nevertheless, a sports association must ensure that third parties are not unreasonably denied access to the market.
3. The protection of a sports association’s own economic interests is only problematic from the point of view of competition law if a competitor is thereby unjustly denied market access. The protection of self-interest by a regulating sports association is not per se anti-competitive.
4. Compulsory arbitration to CAS may be justified, if necessary, by legitimate objectives related to the specificities of sport, as long as access to state courts of last resort is preserved. (Sentencing guidelines)
BGH, Beschl. V. 27.9.2022, Az. KZB 75/21 (previously: OLG Frankfurt a.M., Beschl. v. 22.4.2021, Az. 26 Sch 12/20).
Unrestricted control of domestic arbitral awards under antitrust law
§§ Sections 19 to 21 GWB, Section 1059 (2) no. 2 b ZPO
Arbitral awards are subject to unrestricted factual and legal review by the ordinary court with regard to the application of Sections 19 to 21 GWB. (Official lead sentence)
OLG Frankfurt a.M., Urt. v. 15.11.2022, Az. 11 U 60/21 (Kart) (final; previously: LG Frankfurt a.M., Urt. v. 10.6.2021, Ref. 2-03 O 309/19)
Transparency of sports regulations with threat of punishment
§§ Sections 19 (1), 33 GWG
If a sporting statute provides that a penalty may be imposed in case of participation in an unrecognised or unauthorised event the basic prerequisite for a lawful sanction against an athlete is the existence of legally permissible licensing provisions for the event, participation provisions linked thereto and transparent and non-discriminatory sanctioning provisions (following OLG Nuremberg, final judgment of 26.1.2021 – 3 U 894/19). (Official lead sentence)
LG Hannover, Urt. v. 12.10.2022, ref. no. 32 O 119/22 (not legally binding)
Void dismissal of a managing director
§138 BGB; §§ 35 para. 1, 38 GmbHG; § 241 AktG
- The decision to dismiss a managing director of a GmbH (limited liability company) with the expectation that the GmbH may not be managed for a longer period of time can be considered contrary to morality.
- A violation of the statutory order of competences exists if it can be inferred from the articles of association itself that a third party who does not belong to the circle of shareholders is to be granted an equal right of co-determination and this equal right of co-determination of the third party is overridden without at the same time amending the articles of association.
- If a resolution violates the order of competences in the articles of association, this is not merely a selective violation of the articles of association, but a violation of the articles of association that establishes the status quo, which is invalid if the resolution is not simultaneously included in the articles of association. (Guiding principles of the SpuRt editorial o
VG Stuttgart, Urt. v. 12.5.2022, ref. 5 K 1433/20 (legally binding).
Determination of the illegality of police measures in the vicinity of a football match
§§ Sections 6, 27 a subsection 1, 27 a subsection 2, 28, 36 PolG BW 1992
- The person concerned cannot in principle counter a claim based on disturbances arising from a confusing group situation by arguing that the police themselves created the confusing group situation in the first place by wrongly conceiving or carrying out the overall operation. (para. 116)
- A prolonged detention that does not follow a uniform course but changes in the course of time with regard to its purpose and location can be legally considered separately with regard to the individual periods of detention. In the legal assessment, it must be noted that for a permanent administrative act to be legal, it is not sufficient that the prerequisites of the measure are merely established once at the time of the order. In the course of the control accompanying the procedure, it is rather necessary to keep an eye on the continuation of the prerequisites and to evaluate them, as far as the time and personnel capacities of the police allow. (para. 147)
- “Place” in the sense of § 27 a (1) PolG (old version) does not mean the territory of a municipality, but a narrowly defined area. Therefore, the framework set by section 27 a (1) of the old version of the Police Act is exceeded, at least in the case of an order to leave a place, the territorial scope of which covers the entire urban area of a large city. (margin note 202) (Official guidelines)
ArbG Erfurt, Urt. v. 23.2.2022, ref. 8 Ca 325/20 (not legally binding).
Ordinary termination in insolvency proceedings
§Section 613 a (4) BGB; Section 113 InsO
- Ordinary termination of a fixed-term employment contract by the insolvency administrator is effective under section 113 InsO if the contract was concluded with the administrator.
- In the event of cessation of match operations by the employer, the job of a sports director whose contractual task is primarily to coordinate professional match operations ceases to exist. (Guiding principles of the SpuRt editorial office)
ArbG Hamburg, Urt. v. 26.7.2022, ref. 24 Ga 3722 (nothing legally binding).
Employment as sports director
Art. 1, 2 GG; §§ 242, 305, 307, 310, 611 a, 613 BGB; §§ 894, 940 ZPO; § 62 ArbGG; § 7 BUrlG
- The employee may refuse to take leave for a period determined by the employer if he has a right to refuse to take leave because the employer did not ask him about his wishes for leave, as required by section 7 subs. 1 sentence 1 BurlG. (para. 52)
- A written assertion of the right to employment vis-à-vis the employer may at the same time constitute a refusal to take unilateral leave. (margin note 52)
- An authorisation granted to the employer by a standard form employment contract to release the employee from work only if there are objective reasons is incompatible with the basic idea of the right to employment. Contractual clauses which do not require a substantial employer interest to justify a release from work constitute a form-based advance waiver which is unreasonable for the employee, which is why they are invalid under § 307 (1) sentence 1 BGB. (para. 55)
- 4.If the employer does not use the sanctions at his disposal, e.g. admonition or warning, to encourage the employee to behave in accordance with the contract, he is precluded from using breaches of duty to justify an interest in exemption. (para. 60) (Official Guidelines)