The Sports Law Review: United Kingdom - England & Wales

Organisation of sports clubs and sports governing bodies

i Organisational form

The exact legal structure that a sports entity adopts will broadly depend on its purpose and mode of operation. The legal structures such entities usually adopt are one of the following:

  1. private and public companies limited by shares;
  2. companies limited by guarantee;
  3. charitable or community interest vehicles; or
  4. unincorporated associations.

A company limited by shares is likely to be the preferred format for sports clubs engaged in commercial enterprise seeking to generate profit for shareholders or raising finance from external investors.

A company limited by guarantee is often the legal form adopted by governing bodies. While governing bodies might undertake activities which generate profits, those profits are normally reinvested by the governing body in its particular sport and therefore such entities have no need to distribute profits using share capital.

ii Corporate governance

While there are no existing governance laws that apply exclusively to sports organisations, general guidance is available to provide sports bodies with suggested elements for good governance that they are encouraged to follow. For example, the Sport and Recreation Alliance produced a Voluntary Code of Good Governance, setting out seven principles of good governance that it recommends that sports bodies implement to perform their role effectively. The Code underwent a general review in 2020, with particular focus on good governance and equality, diversity and inclusion in sport, and the wider changes were announced in July 2021 (with the full revised Code to be published in September 2021).2 As part of the changes to the Code, organisations will be asked to implement and promote good governance standards throughout their wider operations. In response, the FA has issued its Code of Governance for County Football Associations and the ECB has launched its Governance Framework for county cricket.

Similarly, certain governance requirements are set out by public funding bodies (such as UK Sport and Sport England, who have established a Code for Sports Governance relating to levels of transparency, accountability and financial integrity)3 that are prerequisites to receiving funding or for validly participating in a sporting competition. As an example, the three main governing bodies in English football (the FA, Premier League and EFL) now administer an Owners' and Directors' test to ensure that individuals seeking to take control of a football club meet required standards to demonstrate their adequacy and suitability to run such a club. This has become a significant aspect of modern football and is fraught with controversy (particularly in light of more recent ownership issues arising for clubs such as Bury FC, who no longer exist as a football club, and Wigan Athletic FC, each of whom has faced punitive sanctions from the EFL as a result of poor ownership and mismanagement). Similarly, the takeover bid by a Saudi Arabian-backed consortium for Newcastle United fell through in 2020 after the proposed £300 million deal had come under significant scrutiny under the Owners' and Directors' test,4 largely in light of Saudi Arabia's human rights record and its handling of TV piracy. The process suffered a significant delay as a consequence of the Premier League failing to establish the exact links between PIF (the prospective buyers) and the Saudi Arabian government, particularly in light of the country's involvement in extensive piracy of broadcast rights through illegal streaming services.

Aside from the above guidance and regulatory requirements, sports bodies are required to comply with the general legal framework that govern their specific legal form (e.g., the Companies Act 2006 (CA 2006) in the case of private or public limited companies).

iii Corporate liability

There are no specific legislative provisions in place that apply solely to officers of sports clubs or governing bodies. However, directors of sports bodies (provided such bodies are structured as companies) do remain subject to the general directors' duties set out in the CA 2006 – these include:

  1. acting within their powers (Section 171);
  2. promoting the success of the company for the benefit of its members as a whole (Section 172);
  3. exercising independent judgment (Section 173);
  4. exercising reasonable care, skill and diligence (Section 174);
  5. avoiding conflicts of interest (Section 175);
  6. not accepting benefits from third parties (Section 176); and
  7. declaring interests in proposed transactions or arrangements (Section 177).

Such directors will also be subject to further legislation governing companies in the UK (e.g., the Insolvency Act 1986) and will need to comply with this accordingly. Failure by directors to abide by such statutory provisions may result in a director being held personally liable for a breach of their obligations as a director of the company.

Existing rules within football in particular have caused controversy in respect of insolvency issues in recent years. For example, the Football Creditors Rule, set out in the EFL's articles of association,5 provides that, where an insolvent club cannot afford to pay each of its creditors in full, 'football creditors' (including players and other football clubs) should receive priority in respect of outstanding payments owed to them by the club. In effect, this means that the UK tax authorities (HMRC) do not receive preferential treatment and are treated as an ordinary unsecured creditor. Accordingly, this has led to a series of disputes brought by HMRC against football clubs and the EFL itself, with the 2012 claim against the latter being brought on the basis that the prioritisation of football creditors breached the fundamental insolvency principle that any unsecured creditors should be paid on a proportionate, pari passu basis.6 This claim was rejected as there was deemed to be no deliberate intention by the EFL to evade insolvency law.

The dispute resolution system

i Access to courts

Parties may choose to resolve their disputes either before national courts or before an arbitral tribunal. Where the parties have not agreed to arbitrate, national courts are competent. However, the majority of sporting governing bodies in England and Wales have internal dispute resolution mechanisms, which usually need to be exhausted before external courts or tribunals can be competent.

However, national courts may still have jurisdiction even where an agreement to arbitrate has been concluded – albeit to a limited extent. Indeed, a party may appeal a governing body's disciplinary sanction before domestic courts, who will take on a supervisory role and subject governing bodies to a standard equivalent to that applied by the courts to public bodies.7 Domestic courts will ensure that:

  1. the relevant regulatory or contractual framework gave the governing body the authority and power to act as it did;
  2. the governing body did not abuse its power;
  3. the decision reached is rational; and
  4. the governing body acted fairly as regards the process by which a decision was taken (i.e., in accordance with the principles of natural justice).

ii Sports arbitration

Under English Law, the Arbitration Act 1996 authorises parties to resolve their disputes through arbitration, provided that all parties agree in writing. These disputes tend to be more beneficial to parties owing to the speed, confidentiality and cost of the process. However, exceptions such as criminal law, employee rights to enforce statutory rights in the Employment Tribunal or insolvency proceedings must be resolved through litigation before domestic courts.

In practice, arbitration provisions are usually contained in the rules of governing bodies (e.g., the FA, the Premier League, the EFL), thereby forcing participants to engage in arbitration. Similarly, athletes' employment or representation agreements often require parties to submit disputes to arbitration. If a domestic court is seized with a claim in breach of an arbitration agreement, it will stay its proceedings in deference to the arbitration agreement.8

While an arbitral award may be challenged before domestic courts, it is limited to the following:

  1. the tribunal was not competent to rule on the dispute;9
  2. there is a serious irregularity affecting the tribunal, the proceedings or the award that has or will cause some injustice;10 and
  3. the appeal is on a question of law arising out of the award (although this ground for appeal may be excluded in the arbitration agreement.11

Where there are no specific arbitration rules relating to a particular governing body, parties may adopt those of Sport Resolutions (UK), an independent dispute resolution service that provides sport-specific ADR services. The Court of Arbitration for Sport may also be competent depending on the requirements of the relevant national or international governing body.

iii Enforceability

Sports governing bodies may enforce sporting or financial sanctions themselves through provisions of their own rules. However, a party may also use enforcement powers available in litigation procedures and in the Arbitration Act 1996 to enforce decisions in their favour.

Organisation of sports events

i Relationship between organiser and spectator

Despite the dramatic increase in the value of sports events, it remains the case that there is no proprietary right in an event12 itself. Indeed, as an event cannot be 'owned' in the ordinary sense of the word under English law, there is no recognition of a tort of unfair competition that would protect organisers from individuals seeing and describing an event. Hence sports events remain principally protected by the laws of property controlling access to a venue and a variety of contracts controlling rights around the event.

Organisers may protect their interests through the issuance of tickets and strict enforcement of their terms. While these terms may include restrictions (such as limits on sharing footage of the event or the resale of tickets), any condition must be made clear to the spectator at the time of purchase and comply with consumer protection laws.13 Organisers may restrict access or evict individuals who breach the terms of the ticket, while also suing for breach of contract, trespass or both.

ii Relationship between organiser and athletes or clubs

In most sports across England and Wales, a pyramid structure is implemented with a national governing body (i.e., the FA) at the top and athletes or clubs connected lower down. Where the governing body is also the competition organiser, the relationship with athletes or clubs is regulated through the governing body's participation agreement or rule book.

Where the competition organiser is a distinct entity from the governing body (as the Premier League or Premiership Rugby), then a shareholder model may be used to allow participants to engage in collective decision-making regarding the rules of the competition and any commercial arrangements between competitors.

iii Liability of the organiser

Event organisers may be liable from a civil perspective on the grounds of negligence if they breach a duty of care that they owe. Although it is frequent for event organisers to limit their liability contractually, for instance in participation agreements or ticket terms, certain elements cannot be excluded. Indeed, the common law principle of duty of care requires event organisers to take reasonable care in preventing a person's injury, for instance by providing appropriate medical equipment within sufficient proximity of the event location.14

The civil liability of event organisers may also arise out of the Occupiers' Liability Acts of 1957 and 1984. The 1957 Act provides for the duty owed by an occupier (a party who exercises an element of control over the premises) 'to take such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises',15 while the 1984 Act provides a lesser protection towards trespassers.

Additionally, the Safety of Sports Grounds Act 1975 provides that, in relation to stadiums with a capacity of over 10,000 or over 5,000 for the Premier League and EFL,16 it is a criminal offence to admit spectators into such sports grounds in the absence of a safety certificate from local authorities.

iv Liability of the athletes

Athletes' liability towards spectators is limited as spectators are considered to have consented to a risk of reasonably foreseeable events. While some incidents are clearly unforeseeable, it is rare for these cases to reach the courts as athletes or clubs tend to handle them directly with the concerned spectators.

Regarding other athletes, liability may arise out of assault or negligence. The former requires assault or battery to be intentional, which is a strict test to pass and has reduced successful claims. On the other hand, while negligence requires 'something more serious' than a mere sporting error,17 a vacuum still exists and cases remain very fact-specific in light of the specificity of sport. In terms of liability, an athlete's employer may be liable for damages through vicarious liability although this would require a close connection between the athlete's tort and their employment.18

v Liability of the spectators

Following a surge in hooliganism in the 1970s and 1980s, the aim of the Football Spectators Act 1989 was to keep sporting events safe from violence and disorder. The Act gives the courts the power to impose a banning order against specific supporters and restrict them from attending football matches nationally and internationally to help prevent violence or disorder in connection with any regulated football matches.

vi Riot prevention

As mentioned above, legislation was passed to address hooliganism and rioting. Legislation made it illegal to stand at specific types of football matches and made it a criminal offence to dispose of tickets to football matches without authorisation.19

Further, clubs are required to fund special police services for their home matches. The police can only charge clubs for the cost associated with operations being conducted inside the stadium, rather than directly outside the club's premises.20 Several judges have expressed concern over public funds being spent in relation to safeguarding an event that is held on a commercial basis. It is, however, unclear whether Parliament will change the law to require clubs to pay for police services in the immediate vicinity of their home stadiums.

Commercialisation of sports events

i Types of and ownership in rights

For sports organisations, there are various rights available that can be exploited for commercial benefit – in particular, sponsorship, broadcasting, merchandising, sports data, hospitality, and ticketing possess significant inherent revenue-generating potential.

In relation to sponsorship, there is scope for both sponsor and rightsholder to benefit from the popularity and viewership of sport. Sponsors traditionally look to promote their brand in the hope of enhancing goodwill through association with the rightsholder. In recent years, sponsors have increasingly looked to access and exploit rightsholder data to support their businesses. As for sports rightsholders, they can market the sponsorship rights attached to a sport event or entity in exchange for sponsor investment. The structure of this will usually be a straightforward contractual relationship between sponsor and rightsholder.

Broadcasting rights similarly offer an opportunity for broadcasters to make significant profits as a result of consumer subscriptions or viewership and advertising, while sports rightsholders will attract significant financial investment from broadcasters in return for packages of rights that permit the broadcasting of the relevant sport, usually on an exclusive basis. For example, the FA Premier League collectively sold packages of rights to broadcasters in 2018 for the three seasons 2019/20 to 2021/22, with BT Sport purchasing the rights to 52 PL fixtures, Sky Sports acquiring 128 fixtures and Amazon obtaining 20 fixtures21 through the Premier League's sales process. In 2021, the Premier League announced that each of its clubs had collectively agreed a three-year renewal of these UK live and non-live broadcast partnerships, with the UK government adding an Exclusion Order under the Competition Act 1998 to enable the league to proceed with the renewals without the need for a tender process – undoubtedly symptomatic of the significant financial impact caused by the pandemic on the sport.22

Sports event organisers typically grant a licence to the broadcaster to access the venue to create the broadcast. The copyright in the images of the sporting broadcast will be owned by the producer or director and similarly by the producer in the sound recordings of the broadcast.23 It is therefore standard for the ownership of the copyright to be assigned by the broadcaster to the sport event organiser, and in turn for the organiser to license the broadcasting rights back to the broadcaster to be broadcast in a specific territory.

The Premier League have encountered resistance to their tendering process for the purchase of the broadcasting rights to the Premier League fixtures, both in 2006 when the Premier League was pushed into making revisions to the process by the European Commission24 and in 2014 when Ofcom launched an investigation into how the Premier League sells its broadcasting rights (albeit Ofcom then dropped their investigation in 2016)25, both largely on anticompetitive grounds. Specifically, the Premier League's rights packages were preliminarily viewed to be foreclosing access to the market and limiting the choice for consumers, while the joint selling arrangements of such rights were viewed as amounting to illegal price-fixing in breach of Article 81 of the EC Treaty.26 The limited number of broadcasters that acquired broadcasting rights to Premier League fixtures, as well as the significant inherent value attached to such rights, has thus attracted significant scrutiny from Ofcom in recent years.

ii Rights protection

The main sports-related rights fall within the protection of a framework comprising image rights, trademarks and copyright or database rights.

Image rights

In the UK, there is no existing legal recognition for image rights, save for tax purposes.27 Rather, an individual's image rights can be protected by relying on various IP rights, such as trademarks and copyright and the common law doctrines of confidentiality and of passing off. Passing off protects an individual's image rights by preventing third parties from selling their own goods or services using the relevant individual's image rights. The individual must demonstrate: existing goodwill in the offending goods or services; that the offending party has made a misrepresentation in respect of a link between the individual and the relevant goods or services, and this has lead to confusion of either existing or potential customers; and damage or the likelihood of damage as a result of the offending party's misrepresentation.28

There is also no specific right of privacy afforded to individuals.29 Should a sportsperson be photographed in circumstances that were intended to be private,30 provided the photograph is not then being used in a fair and lawful way,31 then the sportsperson can look to bring actions for breach of confidence, misuse of private information or infringements under the Data Protection Act 2018 (DPA).32

Ensuring that the relevant sportsperson's image, as well as the accompanying rights attached to their image, are defined clearly, and including appropriate provisions within any player transfer agreement involving the individual and a sports club, will aid in clarifying the position on their image rights and avoid future uncertainty.33

Trademarks

A rightsholder may wish to register a UK trademark (a badge or indication of the trade origin of the relevant goods or services) with the UK Intellectual Property Office to obtain an exclusive right in the mark,34 whether this is a word, logo or other brand indicator. Obtaining a trademark registration permits the owner of the mark to take action against any third party that attempts to use the trademark without the owner's consent.35

The restrictions surrounding what can be registered as a trademark are regularly examined in a sporting context; in September 2019, Liverpool FC failed to obtain a trademark registration for the word 'LIVERPOOL'36 on the basis that it possessed such vast geographical significance that Liverpool FC were not permitted to monopolise the word. Conversely, Chelsea FC, Southampton FC and Tottenham Hotspur FC successfully registered geographical place names as trademarks, reflecting the often fine margins between what is acceptable for registration and what will be rejected under the Trade Marks Act 1994 (TMA). Separately, in 2021, a UK Court of Appeal decision upheld a ruling in the Intellectual Property Enterprise Court (IPEC) that UK Gymnastics/UK Gymnastics Affiliation's use of 'UK Gymnastics' had infringed the British Amateur Gymnastics Association's use of 'British Gymnastics', highlighting the ability for trademark infringement to be found even in instances where trademarks don't possess a significant degree of similarity and where no evidence of actual confusion can be found, provided the likelihood of confusion can be established.37

The advantages of trademark registrations for sports entities and individuals are evident; as well as the exclusive right to use the mark, the owner also starts in a strong position when bringing an infringement claim against a third party, since the claimant does not need to prove reputation in the trademark (thus making claims for trademark infringement easier and more certain than passing off claims). However, care should be taken to ensure that a desired trademark will be registrable prior to using the associated brand widely without sufficient protection.

Copyright and database rights

The law of copyright is intended to protect the results of creative ability. It does not require registration, meaning that it arises automatically, and provides protection for 70 years from the death of the copyright owner in the case of literary, dramatic, musical or artistic works38 and 50 years for broadcasts39 and sound recordings.40 Unauthorised use of copyright will constitute an infringement, unless the copying party can raise a legitimate defence. The most common defence is the defence of 'fair dealing', which can permit works protected by copyright to be used for, by way of example, criticism and review,41 depending on the purpose and extent of the copying. Recent UK sport case law has further highlighted that mere similarity (unless it is so obviously similar as to constitute clear copying) will be insufficient to demonstrate infringement.42

In respect of database rights, the 2013 case of Football DataCo43 highlighted that the sui generis database right (SGDR) will subsist in a database of live match data44 provided there has been substantial investment in obtaining, verifying or presenting its contents,45 despite not subsisting in a fixture list.

iii Contractual provisions for exploitation of rights

Broadly, the crux of any agreement entered into between a sports rightsholder and a commercial partner, such as a sponsor or a broadcaster, should be to set out the commercial intentions of the parties in writing, and to clearly identify the rights being granted to the commercial partner, as well as the consideration the rightsholder will be receiving in exchange.

In this respect, the most important issues to address in such an agreement will be those that address the rights being granted to the respective parties. Some of the primary issues to be considered in this vein will likely be:

  1. the exclusivity of the partner's rights;
  2. the applicable territories in which the partner will be able to exploit the rights;
  3. the category or brand sector in which the rights may be covered;
  4. any reserved matters or exclusions relating to the rightsholder or its other commercial partners; and
  5. any approval rights the rightsholder may have over any of the goods produced by the partner.

In instances where the contracting rightsholder may be a sportsperson, it might be wise for the partner to consider including a morality clause to cover instances in which the sportsperson's behaviour may fall below the standard expected by the partner (and thus indirectly reflect poorly on the partner by virtue of their association with the sportsperson). In such situations, the extent and flexibility of any termination right attributed to the morality clause will likely be a point of negotiation between the sportsperson and the partner. From a commercial partner point of view, the precise wording of such a morality clause should ideally avoid listing the specific acts deemed to trigger the clause, but rather include more flexible wording relating to how the rightsholder's conduct has resulted in a loss or reduction in the commercial value of the rightsholder.

Another often contentious contractual issue will be the post-expiry rights of the partner. The partner may be entitled to a right of first refusal or an exclusive renewal negotiation period, or they may exercise a matching rights clause present in the contract, an issue that was considered in greater detail after Liverpool's victory over New Balance in 2020.46

Beyond the above, there are no existing mandatory statutory provisions in such agreements. The bulk of such contracts will contain provisions and boilerplate normally found in other types of commercial contracts.

iv Professional sports and labour law

Mandatory provisions

In the UK, the governing bodies of football, rugby and cricket set and prescribe standard form contracts to be used in their respective sports to govern the relationship between sports clubs and players. The governing bodies produce these standard form contracts after consulting with the relevant stakeholders within the sport. Accordingly, the majority of the provisions contained in the contract will not be negotiated between the player and the club, since the standard contract will deal with the primary obligations of the player and the club, as well as confidentiality obligations, termination rights for each party, etc. Notwithstanding that these provisions will remain the same across the standard contracts, the parties will obviously have the ability to negotiate more bespoke terms, such as salary and image rights payments.

While the parties will have discretion to negotiate the term of the contract, there is a risk that contracts of an excessive length will be held to be unenforceable and will constitute an unfair restraint of trade. Parties should therefore consider ensuring that longer term contracts contain certain recourse elements (e.g., break clauses after a set period of time) to allow the contracting sportsperson to terminate the contract earlier in extremis. Such elements may help to reduce the likelihood of a contract becoming unenforceable on the basis of an excessive duration.

Free movement of athletes

In line with existing EU law (notwithstanding that the UK's adherence to such law is unlikely to remain, or will at least be likely to deviate, once the post-Brexit relationship between the EU and the UK has been finalised)47, any restriction on free movement within the EU is required to: be justified on the basis of a legitimate objective; and be proportionate. The Bosman ruling,48 in particular, demonstrated this principle by removing the ability for football clubs to command a transfer fee for players in the EU moving to another club at the end of their contract with the previous club. An attempt to obtain a transfer fee for a player in such circumstances is likely to be deemed an unlawful restraint of trade on the part of the club.49

Currently, the UK visa administration system requires applicants to have both a sponsor and a governing body endorsement in order to obtain a UK visa. The decision on whether a player seeking a UK visa is eligible on the basis that they have a sponsor and governing body endorsement lies with the relevant governing body.

Application of employment rules of sports governing bodies

It is at the discretion of contracting parties to negotiate provisions contained in a sportsperson's employment contract, provided there is no requirement on the employer to use standard form contracts (and thus be required to include mandatory provisions).

In July 2020, the Employment Appeals Tribunal (EAT) ruled on a high-profile sports employment law case regarding Jess Varnish, which defined the relationship between a cyclist and British Cycling.50 It was found that a cyclist that signed an Athlete Agreement with British Cycling and received various services, equipment and the right to apply for funding in exchange for agreeing to train, compete and fulfil various other commitments, did not receive the status of an employee. Indeed, it was found that the support Ms Varnish received to train and compete did not amount to remuneration, highlighting that having the option to take up a benefit or not (i.e., coaching services from British Cycling) pointed away from remuneration. Further, the EAT ruled that British Cycling was the service and not Ms Varnish. At the time of writing, Ms Varnish still has the possibility of appealing the EAT's decision.

Sports and antitrust law

Although the leading European law legislation is at Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), these provisions had been integrated into national law through the Competition Act 1998. Now that the UK is no longer a Member State of the European Union, however, the European Union (Withdrawal) Act 2018 provides that EU regulations only continue to apply in UK domestic law to the extent that they are not modified or revoked by regulations under that Act. While EU case law is an aspect of retained EU law, this is limited to any principles laid down by, and any decisions of, the European Court, as they had effect in EU law until 31 December 2020 (when the transition period ended) and are not excluded by other provisions of the Withdrawal Act.

Section 2 of the Competition Act 1998 prohibits agreements between undertakings or decisions by associations of undertakings, which have as their object or effect the prevention, restriction or distortion of competition between Member States. Section 18 of the Competition Act 1998 prohibits any abuse by one or more undertakings of a dominant position affecting trade between Member States.

The Meca-Medina51 case is the landmark case in relation to the distinction between purely sporting rules (to which European Law does not apply) and rules that have enough proximity to economic activity (and to which European Law therefore applies). The applicable test is that the 'purely sporting rule' must be limited to its proper purpose and pursued proportionally, meaning that the restriction of competition is necessary, the desired effect could not be achieved through less restrictive means52 and the rule is applied in a transparent, objective and non-discriminatory manner.53 This test was recently applied by Sport Resolutions (UK) in a rugby dispute, finding that a salary cap imposed on clubs operated in a pro-competitive manner by promoting the financial viability of clubs, controlling inflationary pressures, providing a level playing field, ensuring a competitive league and enabling clubs to compete in European competitions.54 However, a margin of discretion may be awarded to sports governing bodies in assessing the legitimacy of the purpose pursued as well as the proportionality of the rules implemented.55

It is worth also considering the common law doctrine of restraint of trade, which is seen as a form of domestic competition law.56 In Dwain Chambers v. British Olympic Association57 for instance, the courts considered the effect of anti-doping rules on an athlete's ability to exercise his or her trade. First, a claimant must establish that his or her ability to earn a living is being restricted by a given rule. If so, the governing body must then demonstrate that the legitimacy of the restriction's aim as well as its proportionality of such restriction.

Sports and taxation

In the case of collective sports, players are most often employees and fulfil their fiscal obligations according to the jurisdiction of their club. Although non-UK resident athletes who are contracted with a foreign club may occasionally be required to play matches in the UK, such circumstances would not qualify as employment exercised in the UK according to Article 15 of the OECD Model Tax Convention on Income and on Capital (MTCIC).

In relation to sports where prize money, appearance fees and other such non-regular revenues are the norm, such as tennis, athletes would be taxed for the fees earned in the UK. Article 17 of the OECD MTCIC provides that athletes in this category would also be taxed in the UK on any sponsorship agreements, with the taxed value being proportional to the appearances in the UK in a given fiscal year.

On the other hand, clubs that compete in continental or international events in the UK would only be liable for corporation tax if they had a permanent establishment in the UK, which is rarely the case.

Specific sports issues

i Doping

At present, doping does not constitute a criminal offence in the UK. However, some of the substances listed on the WADA Prohibited Substances list58 are also criminalised in the UK, including cocaine and methadone. The World Anti-Doping Agency (WADA) produces a document (the World Anti-Doping Code) that harmonises regulations relating to anti-doping in sport across all sports and all countries of the world, as well as providing a framework for anti-doping policies, rules and regulations for sports organisations.59 The national anti-doping organisation in the UK is UK Anti-Doping, who are tasked with results management and case presentation for the majority of sports in the UK.

In instances of non-compliance with WADA's Code, WADA can report such cases to its stakeholders who, in turn, have authority to impose punitive sanctions. There can also be restrictions on what individual sports are entitled to if they neglect to adopt the WADA Code; for example, sports that do not implement the Code cannot be included in the program of the Olympic Games.60 Similarly, if a country does not ratify the International Convention against Doping in Sport, they can be sanctioned by the IOC and other sports organisations, which can ultimately culminate in losing the right to host the Olympic Games.61

ii Betting

As with doping, betting is not illegal in the UK. However, a number of governing bodies in sport have prohibited betting by individuals within the rules of their respective sport and sanctions will be incurred by those found to have breached these rules. A recent high-profile example of this was in December 2020, when England footballer Kieran Trippier was found to have breached rule E8 of the FA's Rules62 relating to various betting offences. Trippier had informed friends of his imminent transfer from Tottenham Hotspur to Atlético Madrid in the summer of 2019, with discussions around them placing bets on the event occurring. He was fined £70,000 and suspended for 10 matches. Although the ban was initially suspended by FIFA, the Court of Arbitration for Sport confirmed the sanction. This increase highlights the emphasis governing bodies place on betting-related offences within sport, particularly given the integrity issues that can arise as a consequence of sportspersons getting involved in betting.

Betting in England and Wales is governed by the Gambling Act 2005 and this act has provisions relating to the process of information sharing with governing bodies in sport. Sports governing bodies will also look to establish synergy with various betting operators by putting in place information sharing agreements to further increase the transparency and integrity in their respective sports.

iii Manipulation

There is no legal definition of match-fixing under English Law. Instead, match-fixing may be prosecuted pursuant to criminal provisions and sport-specific rules and regulations.

The criminal provisions relating to match-fixing include Section 42 of the Gambling Act 2005, Sections 1 and 2 of the Bribery Act 2010, Section 1 of the Criminal Law Act 1977 and the Fraud Act 2006. These provisions apply to match-fixing by including cheating or enabling others to cheat, bribing or being bribed, conspiracy or fraudulent behaviour. Arguably the most successful match-fixing prosecution in England and Wales concerned spot-fixing in cricket, which led to prison sentences ranging from six to 32 months.63 At international level, the Convention on the Manipulation of Sports Competitions (the Macolin Convention) entered into force on 1 September 2019 following ratification by Norway, Portugal, Ukraine, Moldova, Switzerland, Italy and Greece. To date, the Convention has also been signed by 30 other European countries, including the UK, as well as Australia.

Sports governing bodies have also implemented provisions aimed at the prevention of match-fixing as part of their rules. Over recent years, we have seen increased cooperation between, governing bodies and betting operators in analysing irregular betting patterns to detect potential match-fixing. As part of their rules, sports governing bodies may suspend or ban individuals that engaged in match-fixing activities. Provisional suspensions or bans may also be used in relation to individuals being linked to match-fixing operations. Additionally, many sports governing bodies require participants to report any approach associated with match-fixing.

iv Grey market sales

Football is the only sport in England for which the law prohibits the unauthorised transfer of tickets. Indeed, rights holders of other sports would need to rely on the tickets' terms and conditions to bring a claim against anyone breaching those provisions. The exception would be where legislation is passed for a specific event, such as the London 2012 Olympic Games.

However, where individuals are authorised to resell tickets to events, the Consumer Rights Act 2015 requires online secondary ticket platforms to provide the buyer with information on the specific seat they are buying. This includes the section of the venue and the seat number, any restrictions on ticket validity and its face value.64 If such tickets are resold without the authorisation of the event organiser, the information available on the platform allows the specific ticket, and the original purchaser to be identified and can help event organisers pursue claims against offenders. Additionally, following a movement in favour of banning individuals from purchasing multiple tickets to instantly resell them at an inflated price, legislation was passed to ban the use of automated software by ticket touts to buy more tickets than permitted.

The year in review

In 2020, we drew upon the impact of the covid-19 pandemic on the landscape of sport (as well as the effect on the climate of wider industries). With the development and mass rollout of the various covid vaccines, we are – at the time of writing – in a much improved position from this time last year. Sport has bounced back; we witnessed a packed Wembley as Italy beat England to claim the Euro 2020 trophy, Centre Court at Wimbledon was packed to the rafters to watch Novak Djokovic draw level with Roger Federer and Rafael Nadal on Grand Slam wins, and a crammed summer of sport approaches with the Tokyo Olympics, The Hundred, the Lions Tests against South Africa and the Ryder Cup all kicking off in due course.

Nevertheless, the pandemic has had a staggering impact on sport, leaving sports organisations' finances in a precarious position. Consequently, it is fitting that our two focal points following one of the craziest years in sport are the impact of the pandemic and, as part of the desperate collective effort by organisations to boost revenue, the movement and increased traction towards private equity investment.

i Covid-19

The starkest impact caused by the pandemic has been the outright cancellation of sporting events, not least several of the aforementioned competitions. The 2020 Euros and Olympics were both rolled over to 2021, the cost of the latter now officially having risen to US$15.4 billion (although government audits suggest it is almost double this figure),65 with the renegotiation of contracts and additional security measures reportedly adding around £2.1 billion to the total cost.66 On the other side of the coin, the All England Lawn Tennis Club had the foresight to acquire pandemic insurance – as it has since 2003 (owing largely to lessons learned from the SARS outbreak) – resulting in an approximately £114 million payout and a comparatively minor loss of income against other sports. As Ben Carey-Evans (an insurance analyst at GlobalData) observed, 'this could see pandemic insurance move from being a niche product to an essential one for sports and music organisers',67 albeit with the significant likelihood of vastly increased insurance premiums. What is clear is that the economic turmoil experienced by event organisers will almost certainly lead to widescale behavioural changes in respect of measures taken to mitigate risk, as well as a more cautious approach to the drafting of the agreements attached to such events.

Perhaps one of the most noteworthy U-turns of covid-induced decisions this year was the EFL salary cap introduced in August 2020. The cap sought to prohibit total player salary remuneration rising above £2.5 million in League One and £1.5 million in League Two, with the Professional Footballers' Association opposing the caps through successful arbitration proceedings (leading to the withdrawal of the caps by the EFL). Ultimately, the decision hinged on the fact that the EFL did not properly discuss the caps with the players and was in breach of its duty to consult the PFA prior to implementing the caps. If lessons can be taken from these examples, it is that a balancing act needs to be struck by affected parties to ensure that the right steps are taken to protect themselves, but also to ensure that relevant stakeholders are consulted before rushing into potentially significant decisions.

ii Private equity investment

Notwithstanding the hit taken in the last year, the financial potential of sport remains strong. This has been epitomised by the growing trend of private equity investors venturing into the sports market, a symptom of the inherent interest and commercial opportunity afforded by the continued growth of sport, coupled with the current financial struggles of sports entities. In the Premier League alone, football saw RedBird Capital Partners acquire an 11 per cent stake in Fenway Sports Group, the owners of then reigning champions Liverpool, for approximately £533 million in March 2021,68 while Burnley FC were acquired by US investment group ALK Capital by way of a leveraged buyout at the end of 2020,69 just two high-profile acquisitions that showcase the attraction to external investors of short to medium-term 'distressed assets', such as Premier League football clubs dealing with the aftershock of the pandemic. This trend has continued into other sports: in March 2021, for example, CVC Capital Partners acquired a 14.3 per cent stake in the rugby union Six Nations in a five-year deal, with CVC shelling out a combined £365 million over the term to be shared between the six participating Unions (with the respective payments based on respective national audience shares).70 The benefit to each of the parties can be clearly seen: CVC will look to recoup and ultimately profit from its investment in the long term, and cement its strong commercial presence in rugby union (alongside its minority stakes in Premiership Rugby and the United Rugby Championship (formerly Pro14) league), while CVC's investment will help to offset losses of £30–£50 million over the 2020–21 financial year (according to the CEO of the RFU, Bill Sweeney).71 This kind of mutually beneficial investment is likely to continue to be seen, as sports organisations look to get back on their feet.

With this in mind, it would be prudent for investors to consider the emotional connection between fans and sports clubs. As the CEO of Bridgepoint, William Jackson, points out: “investors may have the share certificates, but nobody feels ownership of a club like a fan”72. It is this added sentiment from fans that presents an issue to investors looking at sports clubs exclusively as a business. Sports fans are unique and cannot be dismissed solely as customers, particularly given that, whilst owners, players and club staff come and go, the bedrock of a club remains the eternal support of die-hard fans. The danger of neglecting this additional consideration has been highlighted this year by the emergence and subsequent collapse of the European Super League (the regulatory aspects of which will be considered further below). Especially when backed by governmental and legislative pressure, fan feeling can be a force to be reckoned with and can totally destabilise an otherwise seemingly pragmatic business decision. It is therefore crucial that clubs and organisations manage PR and adopt a transparent communication structure with fans/stakeholders to meet their responsibilities as owners.

Outlook and conclusions

Regulation in football

It is difficult to avoid mentioning the (for now) failed attempt by 12 of Europe's elite football clubs to create the European Super League (ESL), which included six Premier League clubs. Despite the ESL clubs claiming that the creation of the league is what fans wanted, and younger audiences in particular, a study showed that 90 per cent of 'Generation Z' fans in Western Europe were against it.73 The reaction of English fans and of the English public generally was, equally, very much against the creation of a closed league. With such a strong backlash, it took only 72 hours for all the English clubs to announce that they were withdrawing from the ESL. Fan protests continued, however, with Manchester United fans forcing a Premier League match against Liverpool FC to be postponed.

Further to fans, the governing bodies of football were also very much against the creation of the ESL. The Premier League announced that it condemned the creation of the competition, and that the ESL went against the principles of open competition and sporting merit. In addition, Rule L.9 of the Premier League Handbook prohibits a club from entering into any competition other than the Champions League, the Europa League, the FA Cup, the Community Shield or the League Cup without the consent of the Premier League board.

The creation of the ESL highlighted the fragility and complexity of football's regulatory landscape. While it was announced that nine of the 12 ESL clubs had agreed to pay a combined sum of €15 million to UEFA and waive 5 per cent of their earnings from UEFA club competitions for one season,74 the Premier League announced that the six English clubs had agreed to pay a combined £22 million to the league and that measures were taken in case a further breach of this kind was committed. Going forward, the clubs have agreed to an additional £25 million fine and a potential 30-point deduction for any similar transgression.

The creation of the ESL also quickly became a political issue in the UK, and one of its consequences was the UK government announcing a fan-led review of the sport, to be chaired by Tracey Crouch MP (a current Member of Parliament and former Sports Minister).75 The review will consider issues relating to ownership, finance and fan involvement, and there have been calls from senior political figures that an independent football regulator should be created. It can therefore be anticipated that there might be some changes to the regulatory landscape of English football in the coming years.

Footnotes

1 Jamie Singer is a founding partner and Oliver White and Cambise Heron are trainee solicitors at Onside Law.

3 A Code for Sports Governance, Sport England & UK Sport.

7 Bradley v. Jockey Club [2004] EWHC 2164 QB, upheld on appeal [2005] EWCA Civ 1056.

8 S 9(1) and (4) of the Arbitration Act 1996.

9 Arbitration Act 1996, Section 67.

10 Arbitration Act 1996, Section 68.

11 Arbitration Act 1996, Section 69.

12 Victoria Park Racing v. Taylor (1937) 58 CLR.

13 Consumer Protection Act 2015.

14 Watson v .BBBC (2011) QB 1134.

15 Occupiers' Liability Act 1957, Section 2(2).

16 Safety of Sports Grounds (Accommodation of Spectators) Order 1006 (SI 1996/499).

17 Caldwell v. Maguire & Fitzgerald (2001) EWCA Civ 1054.

18 Gravil v. Carroll (2008) EWCA Civ 689.

19 Criminal Justice and Public Order Act 1994, Section 166.

20 Police Act 1996, Section 25; Harris v. Sheffield United Football Club Ltd [1988] 1 QB 77; Leeds United Football Club Ltd v. Chief Constable of West Yorkshire [2013] EWCA Civ 115; Ipswich Town Football Club Co Limited v. Chief Constable of Suffolk [2017] EWCA Civ 1484.

23 Copyright Design and Patents Act 1988 (CDPA), Section 9.

27 Sports Club plc v. Inspector of Taxes [2000] STC (SCD) 443.

28 Consorzio del Prosciutto di Parma v. Marks & Spencer plc [1991] RPC 351.

29 Douglas v. Hello! Ltd [2007] UKHL 21, Paragraph 293.

30 Campbell v. Mirror Group Newspapers Limited [2004] UKHL 22.

31 Data Protection Act 2018, Section 2.

32 Douglas v. Hello! Limited & Ors [2001] 2 WLR 992, Paragraph 55.

33 Proactive Sports Management Ltd v. 1) Wayne Rooney, 2) Coleen Rooney (formerly McLoughlin), 3) Stoneygate 48 Limited, 4) Speed 9849 Limited.

34 TMA 1994, Section 9(1).

35 TMA 1994, Section 10.

38 CDPA, Section 12.

39 ibid., Section 14.

40 ibid., Section 13A.

41 ibid., Section 30(1).

42 Mr Peter Davies v. Wolverhampton Wanderers Football Club (1986) Limited [2019] EWHC 1252.

43 Football DataCo Ltd and others v. Stan James plc and others; and Football Dataco and others v Sportsradar GmbH and another [2013] EWCA Civ 27, 6 February 2013.

44 ibid.

45 Copyright and Rights in Databases Regulations 1997, Regulation 13.

46 New Balance Athletics, Inc v. The Liverpool Football Club and Athletic Grounds Limited [2019] EWHC 2837.

47 See Section X.

48 Union Royale Belge des Sociétés de Football Association ASBL v. Jean-Marc Bosman (C-415/93) [1995] ECR I-4921.

49 Eastham v. Newcastle United Football Club and Football Association [1964] Ch 413.

50 Varnish v. British Cycling Federation (t/a British Cycling) UKEAT/0022/20/LA.

51 Case C-519/04 P Meca-Medina and Majcen [2006] ECR I-6991, CJEU.

52 Case C-309/99 Wouters [2002] ECR I-1577.

53 SEC (2007) 935/1.

54 Premier Rugby Limited v. Saracens Limited SR/Adhocsport/201/2019.

55 London Welsh RFC v. RFU, Decision of 20 June 2012.

56 Days Medical Aids Ltd v. Pihsiang Machinery Manufacturing Co [2004] EWHC 44, [2004] 1 All ER (Comm) 991.

57 Dwain Chambers v. British Olympic Association [2008] EWHC 2028 (QB).

60 ibid.

61 ibid.

63 R v. Majeed, Butt, Asif & Amir Cooke J, 3 November 2011; R v. Amir, Butt [2011] EWCA Crim 2914.

64 Consumer Rights Act 2015, Section 90.

70 www.sports.legal/2021/03/private-equity-investment-in-sport/.

71 ibid.

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