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UNDERSTAND THE RULES OF THE GAME

Financial Fair Play and the Striani Complaint: Where are we now?

Published 17 February 2015 | Authored by: Andrew Smith

Since the publication of the two-part article ‘Fair or Foul? Competition Law and the Financial Regulation of Football’,1 there have been a number of significant developments in the field of financial fair play (FFP). 

As anticipated, UEFA’s new regulatory regime2 was not happily received in all quarters; it has been (and remains) the subject of various legal challenges and complaints (some of which are outlined below). The European Commission (“EC”) has so far declined to initiate a detailed investigation into the new FFP regime, and it appears that any legal challenge is likely to bypass the EC and head straight to the courtroom.

Indeed, 26 February 2015 is a historic day for sport and the law not only because it is the day of the inaugural LawInSport conference, but also because it is due to be day one of a two-day hearing in the Belgian Court of First Instance, at which the lawfulness of theUEFA FFP Regulations will be considered.

This update also considers the measures taken by UEFA to enforce the new FFP Regulations and the sanctions imposed on offending clubs.

 

The Striani Complaint

Daniel Striani is an Italian national who is registered to work as a players’ agent in Belgium. Acting on Mr Striani’s behalf, on 6 May 2013 Belgian lawyer Jean-Louis Dupont (of Bosman fame) submitted a formal complaint to the EC, alleging that the ‘break-even’ obligations in the FFP Regulations are non-compliant with EU law.

The following restrictions on competition were cited in the Striani Complaint:3

  • Restriction of investments;
  • Fossilization of the existing market structure (i.e. the current top clubs are likely to maintain their leadership, and even to increase it);
  • Reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club;
  • Deflatory effect on the level of players’ salaries; and
  • Consequently, a deflatory effect on the revenues of players’ agents (depending on the level of transfer amounts and/or of players’ salaries).

The ‘break-even’ rule was also said to infringe other EU fundamental freedoms, namely:

  • Free movement of capital (as far as club owners are concerned);
  • Free movement of workers (players); and
  • Free movement of services (player agents).

The Striani Complaint contended that such restrictions on competition and violation of EU fundamental freedoms could not be justified by reference to the objectives put forward by UEFA in support of the new FFP regime (namely: long term financial stability of club football and integrity of the UEFA interclub competitions). 

The Striani Complaint did not object to the FFP Regulations in their entirety. Indeed, the 6 May 2013 press release emphasised that:

…this complaint does not at all question the legality of the UEFA rule (also included in the FFP regulation) that states that any club participating in the UEFA competition must prove – before the start of the competition – that it has no overdue payables towards clubs, players and social/tax authorities. In our view, this rule is justified in principle for the attainment of the integrity of the football competition and proportionate to this objective).

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About the Author

Andrew Smith

Andrew Smith

Andrew is a barrister practising from Matrix Chambers in London. He is an employment law specialist, and has a keen interest in sports law and sport generally. His Matrix profile (including Directory recommendations) may be viewed here.

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