Photo by: Katherine Ivill/Getty Images
Following the European Court of Justice's December 2023 ruling on the proposed 'European Super League', recent opinions on the Premier League's potential 2025-2026 salary cap and FIFA's rules on player transfers It shows that Europe continues to learn from decades of soccer experience. Legal developments in American sports.
premier league salary cap
According to an article in Sportico, the English Premier League has approved a proposal to impose a salary cap on player spending from the 2025-26 season. The proposal will be voted on at the June league meeting.
The reported cap is said to be five times the amount the lowest-earning club receives in TV revenue. So last season's cap was worth $653 million. It is worth noting that this cap includes not only player salaries, but also transfer fees and fees paid to players' agents.
The league's proposal builds on years of increases in player salaries that have outpaced increases in revenue. Indeed, the UK government is considering proposals to introduce a government body to regulate the sport as part of its stabilization efforts.
american comparison
In 1984, the NBA became the first major American sports league to implement a salary cap. Over the next few decades, the NFL and NHL instituted their own caps. MLB has no salary cap, but itselfThere is a punitive luxury tax system that serves much the same purpose of keeping player salaries in check.
MLB's lack of a salary cap speaks to a fundamental legal issue that the Premier League also has to contend with. In the United States, the National Labor Relations Act requires employers and unionized employees (such as professional sports employees) to negotiate in good faith regarding wages, working hours, and conditions of employment. Masu. The end result of these negotiations is a collective bargaining agreement that comprehensively governs the operations of the league, including such items as player salaries, benefits, scheduling, the draft, and free agency. Therefore, MLB's lack of a salary cap is the result of resistance to a salary cap by the MLB Players Association.
UK labor law, in particular the Trade Unions and Labor Relations (Consolidation) Act 1992, provides for substantially the same process between UK employers and trade unions. Unsurprisingly, England's footballers' union, the Professional Footballers' Association (PFA), has said the proposed salary cap needs to be consulted.
The Premier League did not respond to a request for comment on whether it considered it necessary to negotiate with the PFA over the proposed salary cap.
super league decision
The uncertainty over the legal basis for the Premier League's proposed salary cap is the latest in European soccer's belated and perhaps unsuccessful efforts to learn from decades of developments at the intersection of law and sport in the United States. This is an example.
In December 2023, the Court of Justice of the European Union (CJEU) issued a judgment reflecting that Europe would be better off looking across the pond regarding the proposed 'European Super League'.
The well-known background is that FIFA and FIFA's European member UEFA want to prevent the creation of a Super League that would involve the best teams in an American-style closed competitive system. In other words, there are no promotions and demotions. When plans for such a league were announced, FIFA and UEFA, supported by furious fans, threatened to suspend teams and players participating in Super League.
The relevant legal background concerns what American lawyers call “antitrust law” and what European lawyers call “competition law.” European Union (EU) competition law substantially follows the US Sherman Antitrust Act of 1890. Section 1 of the Sherman Act prohibits two or more parties from colluding to unreasonably restrict trading in the marketplace. Article 101 of the Treaty on the Functioning of Europe (TFEU) (1958) provides for the same. Section 2 of the Sherman Act prohibits parties from abusing their exclusive position. The same applies to Article 102 TFEU.
At the heart of the CJEU decision is that EU sports bodies are subject to competition law and that their practices and rules are subject to “substantive standards and details to ensure transparency, objectivity, non-discrimination and proportionality.” “procedural rules” must be included. This determination is substantially similar to the reasonableness test in U.S. antitrust jurisprudence, which weighs the anticompetitive effects of trade restrictions against the procompetitive benefits. A Spanish remand court will decide whether FIFA and UEFA's practices and rules meet the tests outlined.
At the same time, the CJEU acknowledged that the unique nature of the sport requires competitors to come together and agree on some rules in order to play the game. Nevertheless, it ruled that Article 165 TFEU, which recognizes the EU's interest in “the development of a European dimension in sport”, does not protect FIFA and UEFA from competitive scrutiny.
Lassana Diarra incident
Another related case is a legal challenge by French player Lassana Diarra. Diarra claims FIFA rules that require his club to be financially responsible for payments to his former club if a player ends his contract early are in breach of EU competition law. did. In an advisory opinion dated April 30, 2024, Attorney General Maciej Špunar agreed with Mr. Diarra's position. Šupnaar recognized that such rules would limit players' ability to move between clubs.
look to america
The issues identified in both the CJEU decision and the Diarra case are well known to sports lawyers in the United States. First, in the 1950s, in cases involving boxing and the NFL, the Supreme Court ruled that other sports leagues could not enjoy the unusual antitrust immunity that MLB had enjoyed decades earlier. Then, in the 1970s, each league decided that its unique nature meant that restrictive rules prohibiting or restricting free agency should not be considered, but should be considered under the rule of reason. persuaded the court. itself illegal, In other words, which is ostensibly illegal. Nevertheless, the league had a hard time convincing courts that these rules were reasonable.
As a result, the league decided to negotiate with players to have such restrictions protected by non-statutory labor exemptions. Non-statutory labor immunity is a policy developed by the Supreme Court that grants antitrust immunity to employers who agree to rules that restrain the labor market, as long as those rules are negotiated with employee unions. The EU also allows non-statutory work exemptions.
For decades, non-statutory labor exemptions have underpinned labor relations in American sports. In exchange for salary caps, player drafts, and free agent restrictions, players are guaranteed a portion of the league's revenue (mostly from television rights). After years of litigation over the scope of exemptions in the 1980s and 1990s, labor relations in American sports have become much more peaceful in recent years. It seems that European sports leagues could have avoided many problems if they had learned from these cases sooner.
