Draft for a Resolution for the Congress in Montreux

LIDC

LIGUE INTERNATIONALE DU DROIT DE LA CONCURRENCE

INTERNATIONAL LEAGUE OF COMPETITION LAW

INTERNATIONALE LIGA FÜR WETTBEWERBSRECHT

MONTREUX 2002

Question No 1:

"Should any special considerations be taken into account in the application of competition law to sport and, if so, which and to what extent?"

WHEREAS

sporting activities and events – whether professional or amateur - play an important social and cultural role in modern society;

the business and financial interests in sporting activities are substantial and appear to be increasing further ("sport business");

the question of what are "sports related rights" is a matter for national law - they can consist inter alia of trademark, personality, design, arena access, copyright, media, database and property rights - ;

the ownership of sports related rights is important in itself and in relation to the application of competition law;

sporting activities may give rise to a variety of competition law problems, in particular in relation to arrangements for the venue of sporting events, the collective and/or exclusive selling or purchasing of media rights, investments in teams, the entry of teams and individual participants in championships, leagues and events, the allocation of fixtures, the allocation of players, the access of spectators and media to the events, the market for sporting agents, the combination of betting and sports, state subsidies and merchandising.

I.GENERAL RECOMMENDATIONS:

1.The LIDC emphasizes that the rules of competition law (the prohibition of "cartel" agreements and behavior, of abuse of dominant positions and the control of mergers) should apply to the economic activities involved in or associated with sport at the international, supranational and national levels.

2.The LIDC considers that there are special considerations that should be taken into account in the application of competition law to sport, as follows:

General Secretary : 1 rue de Bourg – CP 2273 – 1002 LAUSANNE (Switzerland)

Tel: +41 (0)21 324 78 00 – Fax: +41 (0) 21 324 78 01

a)the social and culturalimportance of sport from both a participant and spectator perspective;

b)the need to preserve:

-the integrity of sporting competitions and the uncertainty of results,

-- when betting is involved - the integrity of the betting opportunity,

-the social and economic well-being of sports clubs, which - where justified - may require some redistribution of income;

-the right to participate in sporting events or activities in accordance with objective and transparent criteria and

-the right of the public to be timely informed of major sports events and of their outcome;

c) the requirements of effective governance of sports and sporting

competitions and the autonomy of sports governing bodies;

3.The LIDC recommends that any restrictions on competition should go no further than is necessary to satisfy these special considerations set out in point 2 above.

II.RECOMMENDATIONS ON COLLECTIVE AND/OR EXCLUSIVE SELLING RIGHTS:

The LIDC recommends that – in view of the considerable restrictions to which they give rise - exclusive and/or collective selling of rights has to be limited in durationand by scope and that this should be no greater than necessary.

The LIDC further recommends that in any case of exemption from a prohibition under competition law the competition authorities should ascertain, whether the considerations mentioned above are proportionate and, if not, whether these objectives would be achieved by less stringent, more proportionate means, (e.g. by a “solidarity fund” to redistribute income between clubs).

III.RECOMMENDATIONS ON INVESTMENTS IN CLUBS AND ABUSE OF DOMINANT POSITIONS:

1.The LIDC recognizes the need to avoid conflicts of interest and to preserve the commercial independence of individual competitors, clubs and governing bodies and the opportunity for structures to evolve in accordance with changed business circumstances.

2.Where sports governing bodies have established appropriate rules to regulate the ownership or the exercise of significant influence over competing entities, organizers or events by investors, media enterprises, sponsors, betting institutions and producers of sporting goods the competition authorities should recognize the necessity for such rules.

3.As the governing bodies or joint associations of participants and sponsor pools can occupy a dominant position, the LIDC emphasizes that the rules and by-laws of such entities have to be objective, transparent and should contain no further restrictions than necessary to deliver their prime tasks (for governing bodies including: establishing and applying the rules for the arrangement and management of the sport and the conduct of sporting events, including reconciliation of conflicting interests and disciplinary sanctions).

IV.RECOMMENDATIONS ON ACCESS TO OPPORTUNITIES

1. The LIDC recognizes the right of national governing bodies to regulate the access to professional sport as long as connected to promotion and practice of national teams, but such access must be based on open and non-discriminatory criteria only (e.g. only limited by nationality for a national team).

2. The LIDC furthermore stresses that great care needs to be taken in applying restrictions on the movement of players from one team to another given that such restrictions directly impinge on freedoms of individuals. The competition authorities must ensure that any special considerations cannot be achieved by alternative, less restrictive means (e.g. by a “solidarity fund” to reward clubs for their investment in the training or development of players).

V. SETTLEMENT OF DISPUTES:

The LIDC takes note of the efforts of the EU and the international governing bodies of sport to prevent possible unfair practices, to create systems for security and controls, (e.g. WADA, the international doping authority) as well as to achieve effective international and national arbitration/mediation systems (e.g. T.A.S.), while allowing access to national courts.