The Sports Law Review: Austria
Organisation of sports clubs and sports governing bodies
The regulation of sports raises several interdisciplinary issues with regard to different fields of law. In Austria, the regulation of sports regarding several fields of law is still in the process of development to provide more legal certainty for athletes, sports clubs and federations.
In Austria, sports clubs are almost exclusively organised in the form of associations on the basis of the constitutionally protected freedom of association2 in accordance with the Austrian Association Act (VereinsG).3 This applies not only to simple sports clubs, but also to the federations at the state level and at the federal level. To give an example, professional football in Austria is played almost exclusively in leagues organised by the Austrian Football Association (ÖFB), which is considered to be the umbrella organisation. Each participating association is a member of a regional association (or federal league), which in turn belongs to the ÖFB. Therefore, all associations and their players are indirectly subject to the regulations of the ÖFB, which are issued within the framework of the autonomy of the association's by-laws. Moreover, the ÖFB is a member of the Fédération Internationale de Football Association (FIFA) and the Union of European Football Associations (UEFA).
The dispute resolution system
i Access to courts
The founders of an association according to Austrian law (see Section I above) are obliged to prepare the association bylaws, which must meet certain minimum requirements (Section 3 VereinsG). The association by-laws contain not only the organisation of the association, but also regulate the rights and obligations of the association members. In other words, professional athletes as well as mere association athletes (i.e., athletes who participate in a sports association as a hobby), abide by association by-laws.4 Pursuant to Section 8 VereinsG, the means of settling disputes arising from the association membership must also be stated in an association's by-laws (e.g., by the incorporation of a conciliation clause). In the case of association disputes, an athlete must first refer the dispute to a conciliation body and seek an amicable solution to the dispute. Then, six months after the dispute has been referred to the conciliation body, the dispute may be brought before an Austrian court (the procedural bar of (temporary) inadmissibility to take legal action). The nature of the conciliation body and the scope of the dispute resolution by the conciliation body, neither of which are further determined in the law, as well as the legal nature of any association sanctions arising therefrom, are subject to debate in Austrian literature.5
The right to bring an action before the Austrian courts can only be waived by concluding an arbitration agreement and thus referring the dispute to an arbitral tribunal in the sense of Sections 577 et seq. of the Austrian Code of Civil Procedure (ACCP). Regarding the characteristics of (sports) arbitration, see Section I.ii below.
ii Sports arbitration
Sport thrives on its internationality. As sport connects many people of different origins, especially through internationally organised sport events, complicated legal questions in a cross-border context may arise. In particular, the question arises as to who or which decision-making bodies should decide on the legal issues associated with international sports events. If these were to be regulated by national courts and national laws, there would be a risk of legal fragmentation, resulting in legal uncertainty. Therefore, it seems reasonable that sport disputes should not be decided by the courts but by (private) arbitral tribunals.6
Probably the most famous and important sports arbitral tribunal is the International Court of Arbitration for Sport (CAS).7 The CAS is an institutionally established arbitral tribunal located in Lausanne, Switzerland, which was founded through the initiative of the International Olympic Committee (IOC) in 1983.8 As the first and foremost example of the successful use of arbitration to resolve sports-related disputes, the CAS deals with all types of sports disputes.9 The CAS has different functions: on the one hand, it can be made competent as an arbitral tribunal of first instance for disputes arising from a contractual arbitration clause agreed between two or more parties in favour of the CAS (the ordinary arbitration procedure).10 On the other hand, the CAS can serve as a second instance or appeal instance for the challenge of internal association decisions (the appeals procedure), for example, in disciplinary disputes.11 Most statutes of sports associations contain an arbitration clause establishing the jurisdiction of the CAS.12 The worldwide recognition and use of the CAS for all types of sports disputes brings the further advantage that such disputes are resolved in an internationally uniform manner. Indeed, a typical feature of sports arbitration is the precedent value of arbitral awards. The practice of sports arbitration shows that both the arbitral tribunals in their awards as well as the parties in their submissions regularly refer to the precedent value of previous awards or, conversely, distinguish their cases from previous awards.13
One of the most important features of arbitration – and thus also of sports arbitration – is that parties to arbitration proceedings voluntarily waive state jurisdiction and submit to arbitration by mutual agreement. Therefore, a contractual basis (in the form of an arbitration agreement or arbitration clause) is necessary for every arbitration proceeding, as well as for an arbitration proceeding before an arbitral tribunal with its seat in Austria (Section 583 ACCP).14 However, owing to the imbalance of power existing in the sports world between sports associations and athletes, it is questionable whether this voluntariness on the part of the athletes can in fact be considered to exist or whether such voluntariness can be assumed by referring to an arbitration clause contained in the player's contract.15
Another difference compared to courts is often seen in the fact that arbitral tribunals are regularly composed of experts who have great experience in sports law (proximity of the arbitrators to sports). In countries neighbouring Austria (Switzerland and Germany), there are already groups of experts in the field of sports law owing to the existence of sports arbitral tribunals and a wide range of literature on topics relevant to sports law. Indeed, there is general consensus in the sports sector that arbitral tribunals are to be preferred to courts in sport-related fields. This is mainly because the sport sector has many specific features that can be better met and decided by specialised decision-making bodies. An important reason for this preference could be that the sports sector tends to favour an outcome-oriented approach over a truth-oriented approach.16
In addition, arbitration proceedings in Austria usually have a shorter duration than court proceedings, which is extremely important in organised sports, since there is a particularly great need for timely decisions (e.g., before a sports competition, a qualification or a championship, etc.).17
Confidentiality is often mentioned as a further advantage of arbitration, which would also speak in favour of choosing the path of arbitration in sports disputes. However, there are cases in which sanctions imposed by sports associations are also publicly disclosed so that, for example, the organisers of sports events can become aware of these sanctions. Also, if an athlete challenges the sanction imposed, it is almost impossible to keep it secret, since the association's sanctioning power (especially in the case of doping sanctions) is very much in the focus of the media.18
One of the greatest advantages of arbitration is also seen in the fact that arbitral awards are enforceable in a large number of states on the basis of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958 (Austria is a member state), whereas the enforcement of court judgments generally requires multilateral or bilateral agreements. The declaration of enforceability and enforcement proceedings can be rather lengthy and complicated. In the field of organised sports, however, sports associations, owing to their monopoly positions vis-à-vis athletes, often do not need any enforcement if they win an arbitration case. For example, if the association issues a sanction, the respective athlete can usually no longer participate in the sports competition, which is why there is no need to enforce this sanction.
In contrast, the decision of a conciliation body does not have an enforcement effect comparable to an arbitral award or a court judgment.19 Consequently, if one party does not comply with the decision of the conciliation body, the other party must take legal action and try to obtain a court judgment.
Organisation of sports events
The covid-19 pandemic was and is very challenging for the sports world (not only in Austria but worldwide) in several respects. For instance, numerous annual sport events such as the Euro 2020 football championship, the 2020 Tokyo Olympics, the Vienna City Marathon and the Wimbledon tennis tournament had to be cancelled or postponed. In Austria, the legal framework for organising sporting events has basically remained the same for the year 2020, but there were several changes and long-lasting restrictions, especially in this area, because of the covid-19 pandemic. In this context, a brief overview of a new law is presented below.
Arts, Culture and Sports Protection Act
On 5 May 2020, the Arts, Culture and Sports Protection Act (KuKuSpoSiG) entered into force and aims at supporting event organisers and, above all, tackling their liquidity problems. It is applicable in cases where a sports, arts or cultural event is cancelled after 13 March 2020 because of the covid-19 pandemic and the organiser of the event would thus be obliged to refund the ticket price to the customer. Instead of refunding the amount, the organiser now has, according to Section 1(1) KuKuSpoSiG, the option – at least partially – to issue the amount in the form of a voucher. For which amount a voucher has to be accepted or a payment has to be made depends on the ticket price (for example, if the ticket price is less than €70, the full amount may be issued as a voucher; see Section 1(4) and (5) KuKuSpoSiG). The voucher can also be passed on to other persons and, if the owner of the voucher has not redeemed it by 31 December 2022, the organiser shall pay out the value of the voucher upon request.
However, the KuKuSpoSiG does not primarily apply if the customer purchased tickets for a sports event in a foreign state and was then unable to attend. In such cases, it has to be determined which law and provisions apply to the refund of the tickets. Within the European Union, this is to be answered by Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I Regulation).
Professional sports and labour law
Because of the covid-19 pandemic and the consequent temporary stagnation of the sports world, the ending of numerous seasons of sports events was postponed. This postponement of the seasons brought contractual problems to light, as players' contracts often contain a clause stating that they expire on 31 May or 30 June, depending on the ending of the season. In addition, athletes in several sports usually sign contracts with other sports associations for the upcoming season (e.g., in professional football, there are fixed-term contracts). The legal question thus arises as to the actual end of the contract (on the date set out in the contract or the actual end of the (postponed) season). The answer to this question depends on the applicable law to the contract and the overall content of the contract, taking into account any collective agreements between associations and social partners20 or agreements between associations ('loan agreements') applicable in the respective sport. In principle, it can be stated that an amicable solution between the athlete and the associations is to be preferred and will in most cases be in the interest of both parties (the association and the athlete). Under Austrian law, the player contract is in most cases considered as an employment contract.21 Accordingly, the player has a contractual obligation to his employer, the association, to perform his athletic services. Conversely, the association has the contractual obligation to care sufficiently for the athlete, in the time of covid-19 pandemic, especially to prevent the athlete exposing him or herself to the risk of infection. The specific rights and obligations of the parties depend again on the applicable law and the concrete structure and wording of the player contract.
Sports and antitrust law
From an Austrian perspective, antitrust law does so far not necessarily have to be considered in sports-related matters.
Sports and taxation
In Austria, the employment status of an athlete depends on the individual sport he or she is competing in. While tennis players mostly operate independent businesses, football players are integrated in a team and are thus considered employees of their association. The Austrian tax regime is coordinated towards the variable revenues generated by athletes. As such, employees just have to pay wage tax according to their tax bracket ranging from 25 per cent to 55 per cent; the actual amount is calculated and directly passed on to the tax authorities by their employer. Independent or self-employed athletes such as tennis players have to submit an income tax statement on a yearly basis as to where their income is taxed accordingly, as is the case in any other conventional business. However, there is a relevant exception to this rule: athletes who mostly perform internationally and are not integrated into a sport association but operate independently may opt in to a flat-rate determination of their taxable income. If the financial authority deems the applicant acceptable, an athlete only has to pay taxes on 33 per cent of his or her income (in Austria and abroad) including any revenue from advertisement or prize money.22 This benefits athletes in Austria a lot: under the assumption of having to pay the maximum tax rate of 55 per cent for parts of their income, an athlete can choose to opt in to the flat tax option and is required to pay around 18 per cent of tax on all income during the tax year. There is only one downside to this: as soon as the athlete has opted in to the flat tax option, he or she is not able to deduct taxes from the Austrian tax calculation basis for those taxes that were already (and directly) paid (e.g., prize money won) in foreign countries.23
Specific sports issues
In this section, new laws and legislative plans that have been discussed over the past year as well as selected legal issues that have arisen and continue to arise in connection with the covid-19 pandemic in the Austrian sports sector will be addressed.
In Austria, the establishment of the Federal Anti-Doping Act 2021 (ADBG) was discussed in 2020 and the law entered into force on 1 January 2021. This new law serves to implement the World Anti-Doping Code 2021 and provides a new basis for anti-doping law. In a nutshell, the following amendments were made. There are new anti-doping provisions regarding the protection of whistleblowers (Section 1(1) No. 11 ADBG) and for the protection of persons in particular need of protection (Section 1 No. 4 ADBG). A major amendment is also that amateur athletes are now defined in the law. They are subject to anti-doping violations in the same way as professional athletes, but there are lighter sanctions (Section 2 No. 14 ADBG). In addition, there are further new provisions concerning sanctions for the use of abusive substances outside of a sports competition (Section 2 No. 28 ADBG)), doping prevention (Sections 3 and 24(2) No. 13 ADGB), the establishment of an athletes' commission (Section 5(2) No. 5 ADGB), the inclusion of teams in the national testing pool (Section 9 No. 5 ADGB) and the physicians' duty to provide information (Section 27 ADGB). There is also a new provision offering the possibility to amicably settle disputes between the Austrian anti-doping legal commission, the athlete or another (legal) person, such as the World Anti-Doping Agency (Section 19 ADBG).
Another effort by the Austrian legislator concerns the establishment of a working group to clarify the legal framework with regard to non-profit and sports. The goal of this working group is to create an innovation-friendly environment for the emerging sports industry, which could increase the attractiveness of Austria as a business location. To achieve this, an intensive exchange of information with the main interest groups in esports (e.g., the Austrian Esports Association) is necessary, as is a discussion of the (sports) political framework and social necessities. A few topics should be mentioned at this point, such as the acceptance and official recognition of esports as type of sport in Austria, the potential additional creation of regulations regarding lootboxes in games and a joint creation of framework conditions and requirements for the differentiation between egaming and esports. Furthermore, issues such as the protection of minors, labour law in the context of esports, and tax issues (also in the cross-border context), as well as measures related to the professionalisation of esports in terms of manipulation and anti-doping regulations, have to be addressed by the working group.
It should be stated that esports would generally have to comply with the same regulations applicable to any other type of sports, for example, in terms of anti-doping regulations, etc. In terms of the sport's role-model function, the handling of 'first-person shooter disciplines'24 and the topic of sustainability will also have to be discussed.
iii Prohibition on entering sports facilities
According to several covid-19 regulations, which – or certain provisions thereof – have been repeatedly extended, entering sports facilities for the purpose of practising sports was to a large extent prohibited from March 2020 until May 2021. The only exceptions to the prohibition were top-level athletes, including those in the field of disabled sports, or athletes who pursue their sports activities professionally and earn income from them, or who have already taken part in international competitions. Furthermore, supervisors and trainers of the athletes, as well as representatives of the media, were allowed to enter sports facilities. Moreover, sports facilities could be entered for maintenance and repair work. At least a distance of one metre had to be kept between all persons just mentioned.
The legal situation regarding covid-19 in Austria is extremely complex. There are many different types of regulations in force for different periods of time (e.g., covid-19 emergency measures regulations, each of which has a duration of only two weeks). All of them can be found on the website of the Austrian Federal Ministry for Social Affairs, Health, Care and Consumer Protection.25
At this point, it should be noted that, according to the fundamental principle of legality according to Article 18 of the Federal Constitution Act, every regulation must have a legal basis in law and comply with it. For instance, the Austrian Constitutional Court (VfGH) has decided ex post, upon request, that Sections 1 and 2 of the Regulation of the Federal Minister for Social Affairs, Health, Care and Consumer Protection concerning provisional measures to prevent the spread of covid-19 concerning the prohibition of entering sports facilities (and also recreational facilities) was unlawful.26 However, the files submitted by the Federal Ministry of Social Affairs, Health, Care and Consumer Protection did not show which specific circumstances with regard to which specific possible developments of covid-19 were decisive for the prohibition of entering sports and recreational facilities. However, such documentation would be a prerequisite for the VfGH to be able to assess whether the regulation complies with the Covid-19 Measures Act.
The year in review
Although it is primarily conciliation bodies or arbitral tribunals that are competent in sports disputes, legal issues in sports are also being brought before state courts. Selected decisions by Austrian courts include the following.
In a 2020 decision, the Austrian Supreme Court (OGH) ruled on the liability of an organiser of a cycling race for the injury of a cyclist.27 The organiser would have been obliged to further secure the race route within the scope of its duty to ensure road safety. It would have required a temporary protection of the access road by a steward service or a better coordinated deployment of the motorbike squad to prevent oncoming traffic on the race track. In the opinion of the OGH, a mere reference to the application of the general road traffic regulations is by far not sufficient.
In another decision, the OGH denied the liability of a skier in a collision on the slope due to a fall of the skier.28 The skier did not set any negligent misconduct that would be causal for the fall. The accident was thus to be attributed to the area of sport risk legally permitted.
In addition, the OGH confirmed in a further decision that live broadcasts or recordings of football matches are protected as 'works' in the sense of Section 4 of the Austrian Copyright Act, owing to the fact that the director selects the best of the recordings as well as deciding on the use of slow motion and repetition based on the creative decisions of the employees. Furthermore, the commentator also allows an individual allocation to the creator.29
In the context of the transfer of players between associations, reference is made to an interesting decision of the Regional Court for Civil Matters of Graz in 2020.30 The defendant, an Austrian professional football player, was first an athlete with the Austrian sports association SV Horn, and subsequently with the Austrian sports association FC Wacker Innsbruck. Both transfers were handled by a player agency with which the player had signed a contract in 2016. He was subsequently transferred to the Austrian series champions, FC Red Bull Salzburg, in January 2019. In the course of this transfer, the player made use of another agency. Therefore, the player's long-term consulting agency sued both the player himself and the 'new' agency that was involved in the transfer, invoking the exclusivity clause in the agency contract. The court decided that a professional football player qualifies as an employee under Austrian law and therefore the Labour Market Promotion Act (AMFG) also applies to him, according to which exclusive agency agreements are allowed only if they are objectively justified (Section 5(4) AMFG). Such an objective justification is reflected in the concrete contractual obligations of the player's agent, which must be expressly agreed upon in the player's agency contract, namely as main contractual obligations. In the vast majority of cases, a simple consultation will generally not suffice to justify an objective justification. That being said, the threshold for establishing an objective justification is very high. In the case at hand, the court, after assessing all the circumstances, denied the existence of an exclusive agency agreement and rejected the complaint.
Outlook and conclusions
The covid-19 pandemic was and is challenging for the sports world and also for the legal system of Austria on many levels. It remains to be seen which changes and modifications are to be expected with the new laws and whether the decisions of courts or arbitral tribunals will be issued regarding Austrian athletes and associations in the upcoming year. In the case of successful (desirable) association conciliation or use of arbitration, court decisions are likely to decrease. Apart from that, the ongoing development of esports is also of particular interest.
1 Arthur Stadler is founding partner and Alice An is an associate at Stadler Völkel Attorneys at Law.
2 According to Article 12 of the Austrian State Basic Act, Article 11 of the European Convention of Human Rights and Article 12 of the Charter of Fundamental Rights.
3 In force as of 1 July 2002.
4 Holzer/Reissner (eds), Einführung in das österreichische Sportrecht (2013), p. 43.
5 See the discussion in Druml, Sportgerichtsbarkeit (2017), pp. 55 et seq.
6 In the past, sport associations had rather unpleasant experiences with the courts. For example, FIFA threatened the Italian football association with exclusion from FIFA, with all the resulting consequences for international sports, if Juventus FC, which had been sentenced to mandatory relegation within the association, were to appeal to a national court against this decision, as it intended to do. FIFA used a similar strategy against the French football association in the case of the forced relegation of Olympique de Marseille. In both cases, the matter was not brought before the courts.
7 On the website of the CAS, one has access to the ICAS Statutes, with the provisions S12 to S22 containing regulations of a mainly organisational nature (e.g., tasks of the CAS panels, and structure and organisation of the CAS). The Procedural Rules, which regulate arbitral proceedings before the CAS, are also available.
8 It was the IOC President Juan Antonio Samaranch who came up with this idea.
9 There are other numerous examples of specialised sports arbitration at the international level. To give an example, the International Basketball Federation has established the Basketball Arbitral Tribunal.
10 If the CAS bases its jurisdiction on a contract with an arbitration clause, the dispute will be decided in accordance with the Articles R38 et seq. of the CAS Code 2020 (Special Provisions Applicable to the Ordinary Arbitration Procedure).
11 Should the CAS function as an appeal instance, the conduct of the arbitration is determined in accordance with Articles R47 et seq. of the CAS Code 2020 (Special Provisions Applicable to the Appeal Arbitration Procedure).
12 In international literature, it is discussed whether the mere joining of a sports association by an athlete, without any reference to submitting to arbitration being associated with such joining, is sufficient for the 'consent' of the athlete to the jurisdiction of the CAS. See, e.g., Holzer/Reissner, Einführung 24 (see footnote 4, above); Swiss Supreme Court, 6 November 2009, docket No. 4A 358/2009; Bärtsch, '“Consent” in Sports Arbitration: Which Lessons for Arbitrations Based on Clauses in Bylaws of Corporations, Associations, etc.?', in Geisinger/Trabaldo-de Mestral (eds.), Sports Arbitration: A Coach for Other Players, ASA Special Series No. 41 (2015), p. 95 et seq.
13 Kaufmann-Kohler, ,Arbitral Precedent: Dream, Necessity or Excuse?', Arbitration International 2007, Vol. 23, No. 3, pp. 357 to 378.
14 Rechberger/Hofstätter in Rechberger/Klicka (eds.), ZPO (2019), 5th edition, Section 581 ZPO; Zeiler, Schiedsverfahren (2014), 2nd edition, Section 581 ZPO.
15 See the discussion in Switzerland: Bärtsch in Geisinger/Trabaldo-de Mestral, ASA Special Series No. 41 (2015), p. 95 et seq (see note no. 12).
16 Wirth/Rouvinez/Knoll (eds.), 'The Search for Truth in Arbitration: Is Finding the Truth What Dispute Resolution Is About?', ASA Special Series No. 35, Juris Publishing, 2011.
17 For example, the CAS Code 2020 provides for an expedited procedure (Article R44.4) before the CAS; see further the discussion in Coccia in Geisinger/Trabaldo-de Mestral, pp. 5 et seq.; see also the following quote of the arbitrator Michel Beloff QC as part of a CAS panel in the Award CAS 2004/A/704 Yang Tae Young v. FIG, at para. 4.7:“Finality is in this area all important: rough justice may be all that sport can tolerate.”.
18 In CAS arbitration proceedings, the awards rendered in ordinary arbitration proceedings are confidential unless all parties agree, while the awards rendered in appeal arbitration proceedings (which are, in principle, public) may be treated confidentially if all parties agree (see Article R43 and Article R59 of the CAS Code 2020).
19 According to Section 607 ACCP, an arbitral award is considered to have the same effect as a court judgment.
20 The social partnership is an unique feature of Austria. It is an informal and voluntary cooperation between the major economic interest groups and the government. There are four social partners in Austria: the Austrian Federation of Trade Unions, the Federal Chamber of Labour, the Chamber of Agriculture and the Austrian Economic Chamber.
21 However, athletes can also perform as freelancers or independent contractors, depending on the individual relation of the athlete to the sports association. See Marhold/Ludwig in Marhold/Schneider (eds.), Österreichisches Sportrecht (2016), p. 90.
22 Austrian Federal Law Gazette (BGBl.) II No. 418/2000.
24 This is one of the games in which players can become professionals. To give a few other examples for esports, multiplayer online arena or real-time strategy.
26 VfGH, 9 March 2021, docket No. V 530/2020.
27 OGH, 6 August 2020, docket No. 2 Ob 5/20d.
28 OGH, 4 November 2020, docket No. 3 Ob 73/20m.
29 OGH, 2 July 2020, docket No. 4 Ob 86/20f.
30 Regional Court for Civil Matters of Graz, docket No. 35 Cg 82/19g (not published).