I ORGANISATION OF SPORTS CLUBS AND SPORTS GOVERNING BODIES
The Spanish sports model is basically structured on Act 10/1990 on sport, and developed by various other regulations that deal with the institutions involved in sports, as well as the organisation, governance and development of sports.
However, owing to the particular construction of the state, it is not only the regulations enacted by the Spanish parliament (such as Act 10/1990) that need to be taken into account in this respect: while Spain is a single sovereign state, it is composed of 17 regions or autonomous communities that are vested with a fair amount of autonomy and with competencies to rule on very diverse issues, among them, sports. Therefore, some particularities may be found in specific territories as a result of the powers granted to regions to rule on sports matters.
i Organisational form
From an organisational perspective, Act 10/1990 and the relevant provisions developing it mainly govern the following kinds of sports entities.
Clubs are sports associations composed of natural or legal persons that are devoted to the promotion of one or several sports modalities, their practice by relevant associates and participation in sports activities and competitions.
Clubs that participate in official professional sports competitions of national scope shall take the legal form of a sports limited liability company (SAD). These companies have a special regime established in Act 10/1990 and Royal Decree 1251/1999 on sports limited liability companies and the Companies Act (the Royal Legislative Decree 1/2010).
Federations are private entities with legal personality that, inter alia, are responsible for the organising sports events and competitions, promoting sport and exercising the disciplinary powers within their material scope. Federations develop their own private competencies but also carry out, by delegation, public functions of an administrative nature. Depending on their territorial scope, these federations can be national or regional. Regional federations are part of their overall national federation, but have their own specific rules and regulations.
Leagues are sports associations exclusively and compulsorily composed of sports clubs that take part in official competitions of a professional nature and national scope. They have legal personality and independent autonomy for their internal organisation, even when they are part of their corresponding federation.
The National Sports Council, which sits at the top of the sports organisational pyramid, is the government authority overseeing and ruling general sports activities in Spain.
In addition to the ordinary organisational structure outlined above, Spain has a National Olympic Committee and a National Paralympic Committee.
ii Corporate governance
Good governance issues are gathered under both the legal regulations and the internal rules of sports entities.
Concerns about good governance in sport come under the Spanish Criminal Code, which foresees a specific offence of corruption for managers, employees and collaborators of sports entities as well as referees and athletes for conduct aimed at predetermining or altering, in a deliberate and fraudulent manner, the result of a sports competition of special sporting or economic relevance. Act 19/2013 on transparency, access to public information and good governance also applies to the sport market. On the basis of this Act, some sports entities are obliged to make public information about their functions, regulations and organisational structure, including an updated organigram of the organs they are composed of and the profile of persons belonging to them.
Another relevant piece of legislation regarding corporate transparency is the bundle of rules contained in Royal Decree 1251/1999 on Sports Limited Liability Companies with regard to restrictions on the ownership of shares in these companies and these companies' duties of information. For example, the acquisition of over 25 per cent of the share capital of a company must be authorised by the National Sports Council; professional clubs and SADs cannot participate in the share capital of another SAD taking part in the same competition; and those parties that own 5 per cent or more of the share capital of a SAD cannot hold, directly or indirectly, a participation of 5 per cent or more in the share capital of another SAD, and the financial information of these SADs is to be communicated to the National Sports Council.
A number of internal regulations of sports entities also deal with good governance issues. Those of the Spanish football league, La Liga, may be the most complete and exhaustive, with a focus especially on the aim of the economic control and balance of clubs and SADs.
iii Corporate liability
The general principle of neminem laedere is applicable regarding the liability of managers and officers of sports organisations.
In addition, some sports regulations also specifically refer to this liability. For instance, Act 10/1990 expressly establishes that in cases of wilful intent or gross negligence, managers of clubs will be held liable towards associates, the club or third parties. The general regime of liability of SAD directors is stipulated in the Companies Act, and is quite strict.
Managers and officers are not only subject to civil liability, but also to the relevant disciplinary measures, including those arising out of the legal provisions mainly set out in Act 10/1990 and Royal Decree 1591/1992 approving the Sports Discipline Regulations, but also those that specifically arise out of the internal regulations of sports entities.
II THE DISPUTE RESOLUTION SYSTEM
The Spanish sports dispute resolution system is interconnected, involving not only the ordinary courts but also the dispute resolution bodies of federations and leagues, and arbitration.
i Access to courts
Athletes, clubs and other sports stakeholders may have access to the courts when the circumstances so enable, whether at first instance (e.g., access to the labour courts in employment matters, or to the relevant ordinary courts in purely civil or commercial disputes) or with the intent to challenge certain decisions previously taken by sports or administrative bodies on organisational, disciplinary or other issues. Apart from the ordinary courts is the Sport Administrative Court, which deals with various sports-related issues, even if it has limited ratione materiae scope.
ii Sports arbitration
The rules regarding arbitration in Spain are outlined in Act 60/2003 on arbitration, which permits any and all controversies on subjects that are within the free disposition of the parties to be resolved by arbitrators. A wide range of sports conflicts may be thus brought to the knowledge and decision of arbitrators.
The submission of a dispute to arbitration will require that the parties have agreed on a valid arbitration clause in writing, with no specific formalities in this respect beyond their clear will to bring disputes that may arise between them to arbitration.
Apart from the rules foreseen in Act 60/2003 dealing with general issues (regarding the arbitration clause, the arbitrators, their competence, the basic procedural issues, and the award, its execution and annulment), the specific provisions of an arbitration court administering the procedure shall also be observed (ad hoc arbitration in sports is not common in Spain). The Spanish Court of Arbitration for Sport, created under the auspices of the Spanish National Olympic Committee, and the Arbitration Tribunal for Football, created under La Liga, are two of the arbitral courts to which sports disputes may be brought, provided that the nature of the relevant dispute may be allocated within their relevant material scope.
The enforcement of arbitral awards shall be conducted through ordinary courts in accordance with the provisions specifically foreseen in Act 60/2003 and in Procedural Act 1/2000. The enforcement of arbitral awards can only be challenged on the basis of very restricted grounds foreseen in the above-mentioned Acts (basically, the fulfilment of the award's decision and the cessation of the statute of limitations of the execution).
The internal regulations of sports federation bodies foresee measures that foster the compliance of parties with any decisions.
III ORGANISATION OF SPORTS EVENTS
The key element in events organisation is the compulsory adherence of all members and participants to the rules of their corresponding sports bodies. The federations and leagues normally undertake the organisation of sports competitions.
i Relationship between organiser and spectator
Sports organisers are free to establish the terms and conditions that spectators shall fulfil when attending a sports event. However, in any case, sports organisers shall abide by the mandatory provisions of Act 19/2007 against violence, racism, xenophobia and intolerance in sport events, and Royal Decree 203/2010 approving the regulations on the same subject.
ii Relationship between organiser and athletes or clubs
The organiser ensures the terms of the participation of athletes in competitions by means of sports licences. Upon the signature of the relevant labour agreement, athletes request through their club that the relevant federation issues sports licences that will allow them to participate in the corresponding official competition. When a federation grants a licence, all the relevant sports regulations at the national and international level become binding on the athlete, and he or she thus becomes subject to the organic and disciplinary authority of the organiser.
iii Liability of the organiser
Article 5 of Act 19/2007 establishes the economic and administrative liability of organisers of sports events for all damage that may take place owing to their lack of diligence, or prevention of damage or public disorder. This liability is independent of and without prejudice to any other criminal or disciplinary liability.
iv Liability of the athletes
Owing to the specific characteristics of sport, as a general rule athletes are not liable for damage (e.g., injuries) that they may cause during the performance of a sports activity. In particular, it is understood that athletes assume the risk that is inherent in the sports activity. However, the theory of the assumption of risk only applies to damage caused within the ordinary limits of a sport activity (i.e., behaviours in line with the relevant standards of conduct). Therefore, when an athlete's behaviour goes beyond those limits, he or she can be liable for the damage he or she has caused. In addition, under some circumstances, an athlete can also be found guilty of a criminal offence when he or she had the clear intention to hurt or damage a third party (intent to injure).
v Liability of the spectators
Spectators that breach the regulations under Act 19/2007 can be administratively sanctioned by the competent disciplinary body (not only with economic fines but also, inter alia, with a prohibition of access to sports venues). Spectators can also incur civil liability for any damage that, through their fault or negligence, is caused to third parties. Further, spectators can also be found guilty of criminal offences they may commit during a sports event, not only in sports venues, but also in their surrounding areas.
vi Riot prevention
Pursuant to Article 27 of Organic Act 4/2015 for the protection of public safety, and Article 35 of Royal Decree 203/2010, the public security forces are responsible for security and public order during sports events. Neither clubs nor organisers have to pay a financial contribution towards this public service. However, Act 19/2007 and Royal Decree 203/2010 establish certain measures that clubs and organisers shall implement in sports venues aimed at preventing not only riots but also any kind of violence, racism, xenophobia and intolerance therein. In this regard, organisers are responsible for implementing the necessary measures to prevent riots and guaranteeing that the spectators meet the conditions of entrance to a sports venue. For this purpose, clubs are obliged to arrange the necessary private security in sports venues and to implement all the means necessary to accomplish the security measures imposed by law. In particular, clubs and organisers shall implement, inter alia, a computerised system of access control, turnstiles, security equipment and video surveillance. In addition, all sports venues must have a control room where a security coordinator will manage the security measures in place during a sports event, and will coordinate all the security bodies involved (private security, police, firefighters, emergency services, sanitary services, etc.).
IV COMMERCIALISATION OF SPORTs EVENTS
i Types of and ownership in rights
The main sports-related rights exploited in Spain are athletes' image rights, the broadcasting rights of sports competitions and the intellectual property (IP) rights held by clubs and organisers.
The right to self-image, guaranteed by Article 18 of the Spanish Constitution and developed by Organic Act 1/1982 on the protection of honour, intimacy and self-image, enables athletes (those who practise individual sports and those who render their sporting services in collective sports) to exploit their image and to assign it to third parties.
Each sports competition exploits its own broadcasting rights. The ownership of the sports broadcasting rights will ultimately depend on the competition at stake. However, as a general rule, these broadcasting rights belong to the clubs participating in the sports competition or to the organiser of the competition, or to both. In this respect, the government enacted Royal Decree-Law 5/2015 on urgent measures in connection with the commercialisation of rights to operate the audiovisual content of professional football competitions, by virtue of which it has established rules for the exploitation of the broadcasting rights of the national professional football leagues (first and second division), the Spanish Cup and the Spanish Super Cup, including the distribution of revenues among clubs and SADs (depending on some legal criteria).
Clubs and organisers can also hold IP rights that are exploited through the merchandising activity of their brands and symbols, either personally or through a licence to third parties, based on private law rules.
ii Rights protection
The protection and enforcement of sports-related rights depend on the type of right involved in each specific case.
With regard to athletes' image rights, their defence can be enforced before the ordinary courts through proceedings based on the principles of preference and preliminary hearings or, if applicable, through a relevant claim before the Constitutional Court. In particular, the right to self-image is covered by the civil protection procedure established in Act 1/1982, which provides legal safeguards against illegal exploitation of the self-image right. Spanish jurisprudence has made important contributions to the development of this right.
IP rights are protected through the specific mechanisms envisaged in Act 17/2001 on trademarks that include, inter alia, cessation of actions, removal of effects and compensation for damage in the case of a breach of any IP rights.
The tools and mechanisms foreseen in Act 34/1988 on general advertising and in Act 3/1991 on unfair competition should also be considered with regard to the protection of this kind of right.
iii Contractual provisions for exploitation of rights
In accordance with Spanish law, sponsorship, merchandising and image rights contracts are not expressly ruled by any specific regulation; thus, the parties can freely determine their content with the sole limitations arising out of law.
Nevertheless, a number of provisions typically arise in these contracts, such as the relevant licensing of trademarks and other distinctive signs, non-compete and exclusivity clauses, first refusal clauses and provisions regarding the assignment of IP rights. In this regard, Spanish regulations prohibit the sponsorship of sports events by alcoholic drinks and tobacco brands. The exact definition of the scope of the exploitation and assignment of these rights is also of utmost importance, as is the self-reservation of rights, as the case may be.
The sale of broadcasting rights may be carried out on an exclusive or non-exclusive exploitation basis in accordance with the legal provisions in force. It is mandatory that the duration of the assignment of rights does not exceed three years. In addition, pursuant to Act 7/2010 on audiovisual communication, the exclusive assignment of the television broadcasting rights of sports competitions cannot restrict citizens' rights to information. For this purpose, the broadcasters that hold the exclusive rights with regard to an event of 'general interest for society' must allow other broadcasters to broadcast 'brief information summaries' (of less than 90 seconds) to be used only in general information programmes in which the logo or trademark of the organiser and the brand of the main sponsor of the event shall appear.
V PROFESSIONAL SPORTS AND LABOUR LAW
Professional athletes have a 'special labour relationship' with their employers that is ruled in accordance with Royal Decree 1006/1985, given the special features of the kinds of services to be rendered and the qualities of the persons rendering these services.
i Mandatory provisions
Royal Decree 1006/1985 applies on a compulsory basis to sports contracts, while the general regulations on employment in Spain (especially the Workers Statute) will only apply on a subsidiary basis.
The special relationship of athletes with their employers is of a temporary nature, and salaries are, as a general rule, fixed in the relevant collective bargaining or labour agreement, or in both, apart from in the contract.
The labour relationship may end because of any of the general causes of termination of labour contracts (e.g., expiry of term, by mutual agreement), even if there is a special regime of unilateral termination of the contract by the athlete in exchange for the payment of compensation to the club, which will be the compensation fixed for this purpose in the labour agreement or, in the absence of a provision of this kind in the contract, the compensation established by the labour courts.
ii Free movement of athletes
The free movement of athletes from EU Member States is guaranteed in the same general terms applicable in all EU countries. However, in some sports there are some direct or indirect restrictions on the number of non-EU athletes that can take part in competitions (inter alia, football and basketball). The same happens with minors.
iii Application of employment rules of sports governing bodies
Labour agreements may contain provisions that the parties freely agree (including those potentially already included in the regulations of the sports governing bodies), provided that these do not contravene compulsory laws, in which case they would be deemed null and void.
VI SPORTS AND ANTITRUST LAW
In Spain, competition law issues are increasingly prevalent in the field of sport. Instances of state aid to clubs, the a priori economic control rules imposed on clubs by some professional leagues and the conditions of access to professions (e.g., in the case of licences for football coaches) have led to legal discussions concerning their potential restriction of competition.
The intervention of antitrust law measures in sport is not new in Spain. However, situations encountered in the past (such as in matters related to the freedom of movement of athletes or broadcasting rights distribution) have been resolved, and new issues have developed. While we are probably not in a position to state that a genuinely separate and autonomous competition sports law exists in Spain, it is undeniable that in recent years, the competition rules have come into play and the authorities are involved more and more in the day-to-day activity of sports, and that the authorities take antitrust principles into consideration in their resolution of conflicts. The professionalisation of sport in Spain has had a great deal to do with this.
VII SPORTS AND TAXATION
The main particularities of the tax regime for athletes and professional clubs in Spain may be briefly summarised as follows.
Athletes who are tax residents in Spain shall pay personal income tax (PIT) on their worldwide incomes. The PIT rate is progressive, and can reach up to 48 per cent depending on the athlete's territory of residence in Spain. The PIT rules do not foresee a special tax regime for these athletes (this used to apply in the past).
Athletes who have transferred their image rights to a third party and who have a working relationship with a club that has obtained their image rights as part of the relationship are also taxed PIT on the payments made by the club to third parties for the image rights.
Athletes who are not tax-resident in Spain and foreign clubs that obtain income related to their participation in events in Spain can be subject to non-resident income tax in Spain in relation to their participation in events held in Spain. Double tax treaties (if any) will have to be considered in this respect.
SADs are subject to corporate income tax at a general tax rate of 25 per cent.
VIII SPECIFIC SPORTS ISSUES
Besides the administrative sanctions established by the Organic Act 3/2013 on the protection of the health of athletes and the fight against doping in sport by those who infringe its provisions, under Spanish law, those who, without therapeutic justification, prescribe, provide, dispense, supply or facilitate banned or prohibited pharmacological substances or other prohibited methods to athletes to enhance physical capabilities or modify the results of a given sports competition commit a criminal offence (Article 362 quinquies of the Criminal Code).
Therefore, the Criminal Code punishes doping in sport, but it does not criminally sanction the use of doping substances by athletes, only its provision or supply to the latter. The criminal sanctions established by the Criminal Code include the imprisonment of the offender for a period of between six months and two years, a fine equivalent to six to 18 months' salary, and a special disqualification for the exercise of his or her profession or of holding a public service position.
Act 13/2011 on the regulation of gambling and rules regarding sports betting, which are permitted activities in Spain, provides a general legal framework for online national gambling activities in Spain. However, the 'autonomous communities', in light of the provisions set out in Section I, are competent to regulate gambling within their respective regions, so their regulations must be considered as well.
In particular, Act 13/2011 regulates national gambling performed through electronic, interactive and technological means, which include the internet, television, mobile phones, landlines and any other interactive communication systems. Betting operators must obtain the corresponding licence prior to carrying out any betting activities. Further, Act 13/2011 prohibits the advertisement, sponsorship or endorsement of gambling activities, as well as the advertisement or promotion of gambling operators that do not hold the appropriate licences. The provisions of Act 13/2011 are also applicable to cross-border gaming activities. In this regard, remote betting operators must obtain an administrative authorisation or licence granted by the relevant Spanish authority prior to carrying out their business in Spain.
As mentioned, the Criminal Code envisages corruption offences for collusion between individuals, including a specific modality in relation to professional sports competitions. In this regard, Article 286 bis of the Criminal Code sanctions match-fixing and, in this regard, sanctions club directors, managers, employees and those who collaborate with sports entities, whatever their legal form, as well as athletes and referees, in relation to conduct aimed at deliberately and fraudulently attempting to alter the results of a professional sports match, game or sporting competition. The sanction foreseen for this conduct includes imprisonment of between six months and four years, a special disqualification banning practising in the industry or commerce for a term of between one and six years, and a fine of up to three times the value of the gains obtained by the illicit activity.
As the Criminal Code refers only to the intention to alter results, it is currently not absolutely clear if this can be applied to actions intended to alter the development of an event that can have no impact on the final results.
Finally, a criminal offence will be committed through the mere intent of match-fixing; therefore, it is not required that the effective benefit or advantage intended actually occurs.
iv Grey market sales
Article 67.2 of Royal Decree 2816/1982 approving the General Police Regulations on Public Entertainment and Leisure Activities stipulates that the resale of tickets is prohibited. Notwithstanding this, and bearing in mind that the Regulations only prohibit the resale of tickets on the street (and not, for example, resale through the internet), it is unclear whether the resale of tickets outside those channels established by the organiser of the sports event is prohibited by law.
However, regarding the sale of tickets to a sports event, most organisers impose a general prohibition on purchasers on reselling tickets, thus establishing the conventional prohibition of such resale as valid.
IX THE YEAR IN REVIEW
The following recent decisions of the Spanish courts and authorities on sports-related issues are worth mentioning:
- A judgment of the Supreme Court of 14 May 2019 unified the doctrine criteria regarding the right of football players to be compensated in accordance with the Workers Statute when their temporary sporting contracts expire. Royal Decree 1006/1985 rules on the special labour relation of professional athletes, but the Workers Statute applies in a subsidiary manner. This Statute stipulates that the employee is entitled to a compensation of 12 days of salary per each year of service when his or her temporary contract expires. The Supreme Court analysed two contradicting prior judgments where, on the one hand, the Superior Court of Aragon confirmed the relevant compensation in favour of a second division football player and, on the other hand, in a very similar case, the Superior Court of Madrid denied the compensation to another footballer as it considered that the relevant payment only applied to athletes with 'modest' economy and not to 'elite' players. The Supreme Court finally ruled that the right to compensation was not restricted to the salary level of the employee and confirmed that football players are entitled to the relevant compensation when their temporary contracts expire.
- A judgment of the National High Court of 4 July 2018 dismissed an appeal filed by Sevilla FC against a fine of €60,001 imposed by the Security Secretary of State as regards a match against its city opponent Real Betis Balompié, where the 'ultra' fan group of Sevilla, 'Biris Norte', displayed two banners that contained the logo of the radical group. The Court established that this action violated Act 19/2007 against violence, racism, xenophobia and intolerance in sports and considered that Sevilla FC was not diligent in the adoption of preventive measures to avoid the display of such banners.
- A judgment of the High Court of Madrid of 15 February 2019 dismissed an appeal filed by the football player Pedro León against a judgment of a commercial court that upheld the legality of La Liga's regulations on clubs' salary caps. Back in 2014, the player could not obtain his licence to play in the national competition because his team, Getafe CF, exceeded its salary cap approved for the season of 2014/2015. The athlete considered that the private regulations of the league constituted an abuse of dominant position. However, the High Court considered that the rules of La Liga are compliant with the laws and respond to the legitimate objective of fighting the excessive indebtedness of clubs and promoting the sustainability of professional football.
- The Central Dispute Administrative Court confirmed on 24 May 2018 the resolution of the Administrative Court of Sports of 25 April 2014, which, in turn, ratified the sanction of administrative relegations to the third division imposed by the Royal Spanish Football Federation to Xerez Club Deportivo. The judgment emphasised that the appeal filed by Xerez could not be accepted since the club was not up to date in its payment obligations as of 31 July 2013. In the judgment, the Central Court reasoned that the club breached its payment commitments towards the players, that the increase or decrease of the debt does not imply distorting the infringing act and that the alleged partial payments made by the club do not imply that the club was complying with its payment obligations of 31 July 2013.
- The National High Court, in a ruling of 16 July 2018, accepted the claim of the trade union 'Futbolistas ON' against the Association of Spanish Footballers (AFE) trade union, annulling the requirement imposed so far by AFE of being affiliated with this organisation and being up to date with the payment of its quotes to be entitled to receive the aid provided for in the savings plan called 'the End of Career Fund'. In accordance with this decision, first, second, second B and first female division players are allowed to have access to the End of Career Fund regardless of their affiliation to AFE or any other group.
X OUTLOOK AND CONCLUSIONS
The sports law system in Spain is well developed, but it is still growing and being perfected in line with the relatively rapid conversion of sports into a business.
Spain has moved from amateurism in sports to professionalism over the past 25 years and, as usually happens, the law follows the reality. This has meant that a significant number of changes have taken place in recent years to address problems that were unknown decades ago. The tendency in the Spanish system is to continue to evolve to an even greater extent with the aim of harmonising legislation, as far as possible, with the new trends in international sports law. Spain has come a long way (especially in matters related to doping, bankruptcy, distribution of broadcasting rights, financial control and the coordinated fight against match-fixing), but new challenges are still pending and will require the Spanish legislators' and sports institutions' intervention in the near future.
1 Jordi López Batet is the managing partner and Yago Vázquez Moraga is a partner at Pintó Ruiz & Del Valle.