The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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The EU and Sport: EU Commissioners are the new Referees

Chris Heaton-Harris MEP

TheEUandSportEUCommissionersarethenewReferees

Contents

    Introduction
    Transfers
    TV Rights
    Doping
    The EU Constitution
    Conclusion

Introduction

In the EU Constitution "sport" gets a special mention. In fact, it has a whole article to itself, allowing the European Commission to legislate on all matters sporting.

One can only wonder at what damage the Commission could cause with this new competence; after all, even with its existing very limited powers in this field it has pretty much made a dog's breakfast of everything it has touched in the sporting world and alas, football has been the sport hit the hardest.

Currently, matters sporting are treated like any other area of economic activity by the European Commission. But if you ask any pundit, commentator, stock exchange watcher or better still, someone like Ken Bates, they will say that the decision to invest in sport is rarely based on a sound business judgement nor is it a quick and easy way to make a profit - it is generally an investment in a passion and a way to lose a tonne of cash quickly.

It is true that the top professional sides in any sport tend to be businesses, but they are in a unique market.

In the past, around the world, there has always been a level of governance which somehow understands the specificity of each sport and helps nurture talent and occasionally make, what the European Commission would regard as, business decisions. This level of governance has evolved over the lifetime of each sport and is normally found at the level of a national league or an international federation.

And because each sporting federation has an amazing knowledge of the sport it governs, it generally makes the correct modifications to its rules to keep those involved within it content and ensures that the sport never dies. For example in American Football they have a draft system which helps to redistribute new players (and in turn wealth) in order keep up a high level of competition.

In football we have three levels of governance: The Football Association that looks after the domestic game; UEFA, which has responsibility for the game across Europe and FIFA, the world body that makes the laws of the game and runs, amongst other things, the World Cup. Whilst none of these bodies are perfect, they have managed to evolve the game into one that is played in just about every country around the world and continues to grow.

Alas, politicians feel the need to get involved in football because it looks like they are "in touch" with the electorate. In days past, you would often find Peter Mandelson talking about his passion for Hartlepool FC. Tony Blair has spoken of his passion for 'soccer' and reminisced about watching the Newcastle centre-forward Jackie Milburn from a seat behind one of the goals at St. James' Park. However, seating was not installed behind the goals until the 1990s and Jackie Milburn had left Newcastle when the Prime Minister was four. What is more, Tony Blair was in Australia from the ages of 18 months to six years old. Such attitudes are why, more often than not, politicians cause more harm than good, mainly because they do not understand the complexities that lie behind the grass root, domestic, national and international game.


Transfers

The first major case where the EU got involved with soccer in a major way was the infamous "Bosman Ruling".

Back in 1990 football clubs were allowed to charge transfer fees whenever a player moved between clubs whether they were in or out of contract. Should the two clubs not agree on a fee for an out of contract player, a tribunal was meant to solve the problem. However in 1990 a Belgian football player called Jean-Marc Bosman challenged the rule after his club refused to sell him, despite requesting a transfer. Eventually, in 1995, the case was ruled upon by the European Court of Justice. The ruling stated that the club was in contravention of the freedom of movement in employment, something guaranteed in the Treaties.

To be fair to the European Commission, they didn't foist themselves onto this case - the European Court of Justice just interpreted existing employment legislation, but at the same time European rules changed the game of football in Europe forever. Football became one of the first major cases of that infamous European Law - the law of unintended consequences.

The Court's ruling opened up a whole load of issues over the transfer of players as now once a player is out of contract they can move freely without a transfer fee - and none of the clubs in Europe could afford to see players they had heavily invested in just walking out at the end of their contracts.

The real shift in power, however, was towards the players who could now walk out of contracts, demand much higher wages and bigger and bigger signing on fees and the "football parasite" - the players' agent, who immediately saw that the consequences of this ruling would benefit their trade. This shift has proved detrimental to football with money moving away from the clubs and to the players and agents, which in turn means less contribution to grass roots football and less development in and around the community.

Yes, it was the Bosman ruling that set European football clubs on the road to higher transfer fees - and when the Commission noticed that the level of these fees was of concern to the public, they thought they'd better now meddle with this problem, that European law had helped to create.

The Commission started talking about restricting when players can be transferred, by opening two windows of opportunity during January and over the summer. This "FIFA initiative" which had been pushed by the European Commission has had and will have a huge impact on lower level football. The initiative has been in place in the Premiership and other European leagues for the last three years, and is being imposed upon all domestic competition as of next season.

Bizarrely the European Commission believes that transfer windows are not in fact in contradiction to any freedom of movement! And whatever the arguments are made for transfer windows, all that has actually happened is business decisions that, in the past, took place over the course of the whole year, are now condensed into two short periods - and simple economics suggests that if a commodity is only available for a short period of time, its value is inflated during this period. Thus, instead of seeing transfer fees gradually decrease over the past couple of years, at the top level of football they have continued to rise.

The transfer mechanism has historically been the main tool to redistribute wealth through the lower leagues with the "trickle down" effect. However there is conclusive evidence collected by The Football League which shows that the average aggregate domestic turnover across all English clubs reduced by 45% from £169.7m to £92.4m after the implementation of transfer windows on the Premiership. The effect is likely to be magnified when the whole football league is subject to the same transfer rules. Not only is there a loss of turnover as a result, this also damages the game in a number of other ways.

Talk to the Clubs, such as Coventry, Tranmere and Macclesfield Town, specifically on transfer windows and they all agree that they are not the answer to the problem of inflated transfer fees.

In fact when you add in the new financial circumstances that non-Premier League teams in England now find themselves due to drop in the level of TV earnings then the only route for lower league clubs to take is to stuff their squads with younger, cheaper and/or obscure foreign players, which will in turn affect the level of competition, thus devaluing the game and making the gap between rich and poor clubs even bigger.

Andy Williamson of the Football League described the system as a "registration straight jacket" with no scope for flexibility. Another triumph for political and European intervention!


TV rights

Meanwhile, whilst employment legislation at the European level had the unintended consequence of thrusting transfer fees through the roof, another branch of the European Commission is actively trying to take money out of the game. The Competition Directorate General, a branch of the European Commission decided that the way the Premiership, UEFA and other European Leagues sold the TV rights to view their matches was uncompetitive.

Forget the fact that only the UEFA TV rights are the only ones the Commission should be dealing with - how the Premier League sell its TV rights in the UK should surely be a domestic matter and thus, one for the Office of Fair Trading.

The Commission in their wisdom want every match to be sold separately, which they believe will increase competition.

The Premier League said "This remedy would have decimated the value of the FAPL's broadcasting rights, undermined the whole basis on which the FAPL sold its rights, redistributed broadcast revenue and, most critically, the sporting and consumer benefits which underpin the FAPL as a premium sporting competition."

Think about it. If games were sold separately the larger clubs would benefit, selling their games easily and for a lot of money, whereas the smaller clubs would find it much harder to sell their matches to national and international TV companies.

How much would a TV company pay for the right to show Manchester Utd v Chelsea? And how much for West Brom v Norwich? Once again, this only contributes to make the big clubs bigger and the small clubs smaller, which is not in the interest of anyone.

Spain and Italy have already seen the financial and spectator problems that this can cause. In recent seasons these leagues started late as some of the smaller clubs could not sell the TV rights for their matches.

Not only that, but the effect that televising so many matches had on crowd size and live sport was immense. Juventus now has average crowds of only 28,000, in a stadium that can hold approximately 70,000 people and use to be bursting at the seams.

While the FAPL managed to negotiate an alternative package until 2007, new negotiations will begin shortly and early indications suggest that the Commission has still not learnt its lesson.


Doping

Doping is a specialised and contentious issue within sport, and letting amateurs in sporting knowledge try to dream up legislation on this can only damage sport as a whole.

International governance and standards in this field are very important and the World Anti-Doping Agency (WADA) provides these. Couple this with various national government initiatives, a myriad of rules in specific sports and you have a pretty crowded field.

This, surely, is an area where the European Institutions should leave it to the experts - but no! Twice in the past five years the European Parliament has discussed these matters. These discussions invariably result in calls for the European Commission to get more involved in areas where they have little or no expertise, or to take more powers in different, related areas.

The most recent discussion on this issue was back in February 2005, when the European Parliament's conclusions included:

    Invites the Commission to implement an effective and integrated policy in all related fields (to sport), notably public health, prevention, education and pharmaceutical research;

    Calls on the Commission to propose, in the Seventh Framework Programme, further research into different methods of doping detection and control.

The EU Constitution

So what will be the Commission's next step in their attempt to get involved in sport? Well, it is the European Constitution, which rather than putting together a set of principles by which a free Europe should be governed, as the founding fathers did for the USA, it is seeking to take on yet more powers and impose even more restrictions and bureaucracy upon business, citizens and sport. Americans will laugh at this, but there has been a whole article dedicated to sport and what is called "the specificity of sport".

Some think this is a good thing. Many sporting federations and bodies lobbied for this to happen, wanting to be included in the Treaty and then getting derogations from all the nasty laws that affect sport in a harmful way. Well they got the first bit, but the second part is pie in the sky! While the article does give some dispensation for sport to be different, it takes much more back in powers so that the Commission and Parliament create reams of legislation aimed at restricting and dictating to sport as it does with so many other areas of our lives. Article III-182 says that:

2. Union action shall be aimed at:

    g) developing the European dimension in sport, by promoting fairness and openness in sporting competitions and cooperation between bodies responsible for sports, and by protecting the physical and moral integrity of sportsmen and sportswomen, especially young sportsmen and sportswomen.


    And...

    4. In order to contribute to the achievement of the objectives referred to in this Article,

    a) European laws or framework laws shall establish incentive actions excluding harmonisation of the laws and regulations of the Member States.
    b) the Council of Ministers, on a proposal from the Commission, shall adopt recommendations.

What awful things could come from these few words - Men's rugby union and rugby league sides being sued by nutty feminists for not fielding women, the working time directive limiting the training time of our top football teams or perhaps Romano Prodi's dream of a European Team and not national ones at the Olympics!!! The possible damage that the Commission could do to sport with this article doesn't bare thinking about.


Conclusion

Most people know that politicians, myself included, do not understand sport, and generally our motives for getting involved in sport are all wrong. The track record of the EU in sport is poor to say the least.

With the European Commission looking to get more actively involved in its citizens' daily lives, things do not bode well for the millions of people who actually just want to be left alone by the legislators and get on and enjoy whatever sports they participate in.