The US and EU systems of sport governance: commercialized v. socio-cultural model--competition and labor law.

Kaburakis, Anastasios

The contributions of Foster (1) and Halgreen (2) are the latest in a series of debates, discussions, conferences, and academic scholarship on the subject of United States (US) and (or versus) European Union (EU) sport policy. In the context of international relations and foreign policy, these two main players in the formation of international law frequently conflict due to differences in philosophy and culture.

This research examines the particular differences between US and EU competition and labor law application in sport, investigates the connection between the two, and attempts to entertain the thought of a "balanced approach" in the legal handling of sport matters, bringing the two "worlds" closer together. In the process of bridging certain traditional gaps in culture and philosophy under a legal and policy analysis lens, the reader may become aware that, indeed, the two "worlds" may not be so far apart, as some critics may argue. Instead, considering contemporary sport situations and increased commercialism in the sport industry, they may be growing progressively closer.

The starting point of this analysis involves the examination of specific characteristics featured in the US and EU systems of sport governance. Differences in the philosophies and cultures of the two systems are evident and directly impact policy-making and the legal handling of sports-related cases. In particular, the intricacies of the European "socio-cultural" federalized club-based model differentiate certain policy initiatives in Europe and cases decided by the European Court of Justice (ECJ) from respective issues surrounding commercial sport organizations in the US. In the latter case, both on the professional and the "amateur" level, there have been important decisions -and sometimes Congressional intervention-that have handled sport in a variety of legal ways (either as a commercial enterprise or allowing for autonomy of sport organizations). Thus, examples of such legal handling by courts and policy-making by governmental entities display particular differences between the two often conflicting systems of sport governance, and may even forecast toward resolution of potential disputes in 21st century sport.

This investigation presents cases that were instrumental in the development of the present approaches in US and EU sport policy. These cases will be juxtaposed with key policy changes affecting sport in the two systems. The main objective of this contribution is to pursue a balance between the cultural and philosophical differences of the two "worlds", promoting pluralism and alleviating some of the problems recently documented in EU and US administrations', as well as sport governance bodies' relations. In this process, ideas for future research may be generated. Contrary to popular belief of recent past, this research finds that sport needs politics. Political intervention is a "conditio sine-qua-non" in contemporary world sport policy evolution.

A. The US and EU systems of sport governance

A summary of theory and international sport relations between the US and the EU can be found elsewhere. (3) In sum, scholars argue there is an ideological clash between the two "sides of the pond". (4) Although sport commercialization is not directly attributed to American influences, "American ways are resented as... hostile to many of the sporting values and institutions which have been held dear elsewhere". (5)

Foster (6) offers a description of the two models of sport governance. The characteristics of the European model, frequently termed as "socio-cultural", entail:

* Sporting competition as the major organizational motive

* Open pyramids with promotion and relegation as the league structure

* Vertical solidarity as the governing body's role

* National leagues, local teams, opposition to relocation of teams and transnational leagues as cultural identity

* International competitions as instrumental for national identity, and

* The feature of a single representative federal body as governance structure.

In contrast, the US commercial sports model entails:

* Profit as the major organizational motive

* Closed, ring-fenced league as the league structure

* Profit maximization and promotion of elite stars as the governing body's role

* Transnational or global (clubs according to Houlihan leagues with footloose franchises as cultural identity

* Non-existent or minimal interest for international (national teams per Houlihan) competition, and

* The feature of a league or commissioner as governing structure.

Problems faced by both "worlds" entail the conflict between sport autonomy and state intervention in sport matters. In terms of global sports policy and the legal handling of world sport, these problems become instrumental, as a traditional form of private governance succumbs to the commercial influences of global capital elites. In contrast, heretofore courts both in the EU and the US have viewed International Sport Federations (ISFs) and Sporting International Non-Governmental Organizations (SINGOs) as private clubs, outside legal scrutiny (7). Practices that aimed to prevent litigation from occurring include: compulsory dispute resolution via binding arbitration [e.g. the international Court of Arbitration for Sport (CAS), the FIFA Dispute Resolution Chamber (DRC), and the FIBA Arbitral Tribunal (FAT)]; exclusion and indemnification clauses as prerequisites for athletic participation, so the organizing body would not be held legally liable to the participant; where allowed by national labor law, liquidated damages clauses, etc. Thus, the creation of a unique area of private law, "Lex Sportiva", assimilates "Lex Mercatoria", governing commercial relationships. In a remarkable twist, however, the two meet considering 21st Century sport circumstances.

Research also points out to an interesting paradox in EU sport: on one hand, a formidable political consensus to protect the socio-cultural model and the existing organizational structure in Europe. European policy-makers combat the fear that rampant commercialization of sport in a global economy will lead to a deterioration of fundamental values, such as a long-standing tradition of democracy, self-regulation, and solidarity between sport clubs. At the same time, there is an attempt to uphold the highly beneficial effects of sport on European youth, health, and social inclusion. Halgreen identifies that, as far as EU policy in concerned, there is a firm "No" to an outright commercial model according to American standards, characterized as "the root of all evil...destructive commercialism". (8) On the other hand both Allison and Halgreen find that EU sport features much commercialized force of its own. The authors go a step further commenting that EU sport is actually driving many globalization tendencies.

In a nutshell, this cornucopia of theory and scholarship on the matter of international sport policy and the two main models of modern sport governance, commercialized and socio-cultural, may be summarized by a picture of commercial sport as an accepted practice in the US, whereas the situation is markedly different in the EU. Although, according to Allison and Halgreen, "American ways" are not to blame for mass commercialization of EU sport, bearing in mind that the latter itself plays a central role in sport globalization--even commercialization, in the case of the Champions' League and the Premier League in soccer--tendencies, there still appears to be intense conflict between the supporters of the two schools of thought, or global sport models, the commercialized and the socio-cultural one. Proponents of the former may be characterized as "realists" or "practical", and of the latter as "romantics" or "idealists". Regardless of the terminology used, the latter have established a strong constituency in political circles (e.g. the Committee on Culture and Education of the European Parliament) and decision-making entities such as the European Commission (EC). The socio-cultural model emphasizing traditional values and the educational character of sport still appears to be the major defining factor in EU sport policy, delineating between EU and US sport. Thus, it appears logical to assume that sport entities in the US will be treated similarly to commercial ones, all things considered, by policy-makers and courts. On the other hand EU sport may be defined by limited autonomy of its sport entities, and significant legal and policy intervention in the case of e.g. a commercial practice or a regulation that would compromise the socio-cultural character of sport promoted in its totality by the EC. Hence, the quest for answers that may forecast future sport policy and litigation is on. Such a quest necessarily follows the path of past cases and policy initiatives from the US and the EU, with the two most frequently politically challenged and litigated sectors; Competition and Labor Law.

B. US Competition Law application in sport

I. Antitrust Law theory

The most important piece of federal legislation in terms of competition came in 1890 in the form of the Sherman Antitrust Act (9). The Sherman Antitrust Act (SAA) attempted to promote competition and prevent monopolies, putting an end to unfair monopoly practices and promoting free and open market competition. SAA [section] 1 states: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce...is declared to be illegal". SAA [section] 2 states: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons ... shall be deemed guilty of a felony". The basic elements a plaintiff needs to establish for a SAA [section] 1 claim are: 1) an agreement of two or more in the form of contract, trust, or conspiracy that; 2) unreasonably restraints trade and; 3) affects interstate commerce. For a SAA [section] 2 claim the respective elements are: 1) possession of monopoly power in a relevant market and 2) the use of unacceptable means to acquire, entrench, or maintain it. Specifically for a SAA [section] 1 claim, courts have created various analyses a plaintiff needs to satisfy, in order to prove a particular restrictive business practice is a violation of the SAA. Hence, one encounters such methods as "per se", defined as an inherently anticompetitive practice (e.g. price-fixing or group boycott), "rule of reason", entailing the elements of an agreement that adversely affects competition in which the anti-competitive outweigh any pro-competitive effects (where the defense can legitimize the reason for the anti-competitive practice), or "quick look", a hybrid bridging the per se and rule of reason analyses, according to which a per se condemnation of a practice is inappropriate, but where no elaborate industry analysis is necessary to reveal the anti-competitive character of an inherently suspect restraint (in this way the burden shifts to the defendant to prove justifications). In 1914, a new piece of legislation, the Clayton Act (15 U.S.C. [section] [section] 12-27 & 29 USC [section] 52), strengthened the application of the SAA, additionally trebling the damages a successful plaintiff suffered and may recover. More in-depth analyses can be found in texts such as Weiler and Roberts (10) and Wong (11).

II. Antitrust Law application in amateur sport

What is important to clarify is the peculiar nature of US sport, attempting to clearly "demarcate between intercollegiate and professional sports" (NCAA Constitution, Article 1, Bylaw 1.3.1, Fundamental policy--Basic Purpose). In this way, one might expect that professional sports entities in the US would be treated as commercial ventures, faced with antitrust law scrutiny; the situation assumes a unique twist, though, in the antitrust analysis of the National Collegiate Athletic Association (NCAA). The effort of NCAA member institutions to abide by a strict policy of amateurism bears several problems and involves much litigation Kaburakis (12). Sherman (13) supports the notion that the NCAA enjoys a "quasi-judicial" antitrust exemption. In a nutshell, Sherman (14) argues that the NCAA may be faced with antitrust scrutiny only when litigation involves a business practice, and only in very rare occasions when such cases challenge its internal bylaws. Respective examples are found in the 1984 United States Supreme Court decision in NCAA v. Board of Regents of the University of Oklahoma (15) and the 1998 US Court of Appeals for the 10th Circuit decision in Law v. NCAA (16). In the former case, the NCAA TV football package limiting the freedom of member institutions to broadcast their games was found to be in violation of the SAA [section] 1 per restraint of trade. Nevertheless, the United States Supreme Court acknowledged that "in such an industry...horizontal restraints are essential". In the latter case, "Restricted Earnings Coaches" class members sued successfully (under SAA [section] 1), challenging the limitations on earnings particular coaches might receive by NCAA member institutions. Every other case brought against the Association did not establish a SAA violation (17), while in a recent case, MIBA v. NCAA (18), the parties settled out of court, with the NCAA purchasing the rights to organize the once prestigious and competing NIT tournament]. Wishing to avoid similar challenges, the NCAA proceeded to settle another important case, the most recent antitrust challenge of its policies in regard to setting financial aid limits, in White v. National Collegiate Athletic Association (19),.

III. Antitrust Law application in professional sport

Answering the proverbial question whether sport entities should be handled as commercial enterprises, one should study the lessons from precedent case law. Unlike the majority of cases that involved the NCAA, in most cases dealing with the top professional sports leagues in the US there was SAA scrutiny applied. Many of these SAA challenges paved the way for modern labor relations in US sport. After a summary of related litigation of various SAA claims against professional sports teams and leagues, this research will examine the particular problems in sport labor relations and the way they have been handled by US courts and Congress.

1. Antitrust scrutiny of broadcasting restrictions

a. Collective selling of broadcasting rights.

Congressional intervention frequently proved to be the crucial resolution to problematic matters, in which the United States Supreme Court declined to provide a remedy. In the early days of US professional sport development, the matter of property rights and their use by joint entities such as professional leagues came to the fore. The Department of Justice sued the National Football League (NFL) because of the restriction the NFL imposed on members for any games being broadcast in the home territory of another member (the NFL could restrict other telecasts when there was a home game, but not when the team was away or was not playing). In this way it was argued that pooling of broadcasting rights constituted a horizontal restraint violating antitrust law (20). Even though in the initial stages the practice was found to be indeed a SAA violation, Congress did respond to the challenge in 1961 by enacting the Sports Broadcasting Act (21). Thus, the four major sport leagues were able to sign agreements pooling broadcasting rights ("sponsored telecasting"), being exempt from antitrust scrutiny. The Sports Broadcasting Act (SBA) was a fine example of how policy intervention may provide remedy for commercial realities developing in contemporary sport. Practices that would otherwise be considered as violations of competition laws are allowed due to the unique nature of the sport industry, in order to preserve its character, and more importantly for investors in sport businesses, its feasibility and practicability.

b. "Black-out" provisions.

The "Black-out" provision in Section 1291 (2) of the SBA (1961) gave leagues the power to prohibit the televising of games "in the home territory of a member club of the league on a day when such a club is playing a game at home". In Blaich v. NFL (22), New York Giants' fans sought a preliminary injunction against the "blacking out" of the 1962 NFL championship game between the Giants and the Chicago Bears. They argued that the Section (2) "black-out" provision of the SBA applied only to regular season games. It is interesting to read the plaintiffs' assertion that a basic human right was violated. (23) Their arguments, however, were unconvincing for the District Court. President Nixon appealed with the NFL to reconsider the "black-out" position. Eventually, in 1973 the NFL lifted the local black out of the Super Bowl, in an effort to accommodate an infuriated Congress, which wanted to eliminate "black-outs" especially in sold-out games. (24) In September 1973 Congress enacted legislation requiring the leagues to lift local black-outs of any pooled telecast if all tickets available for purchase before the game were sold 72 hours or more in advance. This legislation expired by the end of 1975, but the NFL continued voluntarily to adhere to its provisions.

NFL v. McBee & Bruno's (25), ended the practice of commercial establishments televising blackout games. NFL v. McBee & Bruno's was a case in which St. Louis restaurants and bars used satellite equipment to televise three blackout St. Louis Cardinals football games during the 1984-1985 season. The NFL contended that they violated copyright law and had infringed upon their telecast copyright. The US Court of Appeals for the 8th Circuit agreed. This case sparked a legal debate as to whether a compulsory license for the public performance of blacked-out professional teams sporting events telecasts should be introduced, to "balance the public demand to watch popular sports programs with the economic interests of the copyright owners". (26) So far no such legislative efforts have been fruitful.

c. Contracts with competing broadcasting networks.

In USFL v. NFL (27) the USFL alleged that the NFL had prevented the competing league from obtaining a profitable TV contract, as the NFL had non-exclusive contracts with all of the networks (ABC, CBS, NBC), giving them the right of first refusal. The appellate court ruled that Congress' specific antitrust exemption of the SBA included contracts with more than one network, unless the contract constituted illegal monopolization or unreasonable restraint of trade in terms of competing leagues.

Similarly, in Chicago Professional Sports Limited v. NBA (28), the Chicago Bulls' contract with superstation WGN gave the superstation the exclusive broadcast right to televise 25 games. The National Basketball Association (NBA) had decided that each team could televise 20 games per season on a superstation (commercial over-the-air-TV station, whose broadcast signal can be received outside the local area by more than 5% of the total number of cable subscribers in the US). The NBA rule had been amended in order for the teams to share profits, whereas before the team could televise up to 25 games and retain all of the revenues generated. The District Court ruled that the NBA's adoption of this new rule limiting the number of games by 20% was a significant restraint of trade, which could not be remedied under a rule of reason test (pro- vs. anti- competitive effects). The 7th Circuit affirmed that decision, stressing the SBA's antitrust exemption would not apply, since the Bulls according to NBA's own regulations possessed the rights to superstation games. Thus the WGN-Bulls agreement was upheld. As a result of this case, the NBA teams -with a narrow vote- decided to transfer all the rights to the NBA. The NBA repealed the 25 game-limit, but demanded that teams pay a substantial fee to the NBA for superstation telecasts. Once again the Bulls sued, seeking the rights to televise 40 games through WGN. The Bulls lost this case on appeal, as the Court found that the Bulls being a member of the NBA had to respect the limitation imposed by the NBA, in regard to the maximum number of games televised on superstations. One notes in such cases that certain limitations upheld under a SAA analysis should be reasonable and within limits acknowledged by the courts or Congress.

d. "Anti-siphoning" provisions.

In further examples of such restrictive practices challenged in court, there have been cases and policy intervention per "anti-siphoning" regulations. In 1968 the Federal Communications Commission (FCC) issued rules prohibiting "specific events" from being sold to anyone other than broadcast TV (e.g. NCAA Final Four, Super Bowl). These rules were challenged in HBO v. FCC (29). The Court of Appeals vacated the FCC regulations on the grounds they exceeded the FCC's jurisdiction in regard to cable; they were not found to be necessary to prevent siphoning; and they were found in violation of the First Amendment as being overbroad. After the HBO decision, the FCC remained silent until the passage of the 1992 Cable Act. In HBO v. FCC the US Court of Appeals for the District of Columbia provided a working definition of the "siphoning" phenomenon:

Siphoning is said to occur when an event or program currently shown on conventional free TV is purchased by a cable operator for the showing on a subscription cable channel. If such a transfer occurs, the Commission believes the program or event will become unavailable for showing on free TV or its showing on free TV will be delayed... A segment of the American people -those in areas not served by cable or those too poor to afford subscription cable service-could receive delayed access to the program or could be denied access altogether. The ability of half a million cable subscribers thus to preempt the other 70 million TV homes is said to arise from the fact that subscribers are willing to pay more to see certain types of features than are advertisers to spread their messages by attaching them to the same features.

The FCC rules could not pass scrutiny under the four-part test set out by the United States Supreme Court in US v. O'Brian (30). Under the O'Brian test the regulations must: (1) fall within the constitutional power of the Government, (2) further an "important or substantial governmental interest", (3) be "unrelated to the suppression of free expression", and (4) impose no greater restriction on First Amendment freedoms "than is essential to the furtherance of government interests". The Court's opinion suggests that the anti-siphoning rules could have been upheld, had the FCC adequately demonstrated siphoning to be both likely to happen and harmful. (31)

For now the combination of protests from fans and most importantly the fear of Congressional intervention seems to have kept payperview and subscription TV at bay when it comes to the largest sports events such as the Super Bowl or the World Series. So far, neither the SBA nor the Communications Act hold a "broadcast guarantee", i.e. legislation in the form of a rule that would ensure a national broadcast TV outlet for play-off/championship events designated as "nationally shared events", but there seems to be little doubt that antisiphoning legislation in sports-loving America to this effect would be so politically popular that such a limitation in major league anti-trust exemption could (if the situation changed) be easily introduced. (32) On the other hand, it would be interesting to research the potential financial impact of major sports championship events offered on cable or pay-per-view TV, in contrast to the public criticism such practices would create. Should sport programming in the US continue to migrate from free broadcast TV to subscription TV for both regular and post-season competitions, the need for such future research would be emphasized.

An amendment specifically aimed at protecting the availability on non-subscription TV of a handful of "nationally shared" sports events would mean compliance with the O'Brian test, and its most difficult prong, the last one, requiring that any incidental restriction of any First Amendment freedom "be no greater than is essential to the furtherance of the government interest". It is useful at this point to juxtapose the "European twist": The Television-Sans-Frontier Directive, Article 3A, forecasting "National Lists of events of major importance for society". These policy matters are further explored in the respective section of this analysis, dealing with EU policy.

2. Antitrust scrutiny of ownership restrictions

Other restrictive practices that have been challenged involve "cross-ownership". In NASL v. NFL (33), the NFL had changed its bylaws to prevent NFL team owners from having an interest in other professional leagues. The Court ruled that these cross-ownership restriction rules were anti-competitive and a violation of Section 1 of the Sherman Act. These rules prevented the North American Soccer League (NASL) from attracting new team owners, unjustifiably under a rule of reason test. The NFL is the only professional league to maintain a ban on cross- and corporate sponsorship. At the same time it is a much disputed practice in US sports to deter public ownership and initial public offerings for shares in professional sports teams. Reasons include an effort to control salaries paid to free agents, and the fact that public ownership would deprive the league of its ability to regulate the sport effectively, as it would be much harder to reach a consensus through thousands of stakeholders.

These matters recently came into discussion after the successful bid by Malcolm Glazer, owner of the NFL Tampa Bay Buccaneers, taking over a controlling share in Manchester United for $1.47 billion. Although the bid and takeover does not compromise NFL's cross-ownership restrictions under the NASL v. NFL decision, there were concerns surrounding Manchester's stakes in casinos both in Europe and in the US. For the European reader, sports gambling in the US is only allowed in Nevada, Oregon, Delaware, and Montana, but only the first two states offer it. Nevada has full-service sports books, while Oregon has a state-run professional football pool during the season. Atlantic City, NJ officials have consistently lobbied for sports betting in New Jersey, to no avail at present (currently only horse racing bets are allowed). New Jersey may have had its best opportunity in 1994, but the federal government's "glove" was not picked up at that time (34). Nonetheless, by means of the internet, creative gambling entrepreneurs have instituted online sports betting agencies via off-shore web-based ventures. In addition, the NFL policies prevent owners and staff from having any ties to sports gambling activities. Hence, Manchester United had to abandon any gambling interests in order to comply by the regulations enforced on its owner by the NFL (Associated Press, 2005). This creates a very interesting ground for future research, especially in light of sports betting restrictions by EU members recently investigated by the EC (35).

Furthermore, in Sullivan v. NFL (36), 115 S. Ct. 1252 (1995), former owner of the New England Patriots William Sullivan challenged NFL policy on antitrust grounds. He was prevented from selling 49% interest in his team in a public tender. He was ultimately forced to sell the team at a much lower price. The key issue usually being "the relevant market", the latter was defined as "sports team ownership" and by restricting a form of ownership the NFL was restricting a form of product -a share in an NFL team- to the public. Under a rule of reason analysis the Court held that the NFL could have achieved its purposes by choosing a much less restrictive alternative, such as a proposal to allow the sale of minority non-voting shares of stock to the public or restricting the size of holdings by any one individual. Eventually the parties settled in 1996 and Sullivan reportedly received $11.5 million over four years.

Similarly, in Levin v. NBA (37), Levin and Lipton were prevented from buying the Boston Celtics, because of their alleged connections to certain individuals deemed undesirable by the NBA, due to illegal gambling activities. The Court upheld the NBA's decision, made on valid non anti-competitive reasons. "The plaintiffs wanted to join, not compete with those not willing to accept them ..." (38).

3. Antitrust scrutiny of players' allocation and teams' relocation restrictions

a. Players' allocation.

Frequently, what defendants in antitrust cases find as a useful defense is the claim of "single entity". For example, in Fraser v. Major League Soccer (39) it was found that professional sports leagues may contract players centrally, instead of contracts with individual franchises. The argument by the defendants was -as usual- that such a practice promotes competitive balance and equity. When there is no collusion, or conspiracy, or trust, or agreement by two parties that leads to anticompetitive effects, essentially one observes no competition. There is only one entity, the professional league, with various branches, its franchises (40).

b. Teams' relocation.

The single entity defense was also used successfully in a relocation restriction decision. In The San Francisco Seals v. NHL (41), the National Hockey League (NHL) Seals attempted a move from San Francisco to Vancouver. The Court upheld NHL's decision preventing the move, without prior unanimous league approval. The Court applied the "single entity" doctrine, implying that anti-trust measures cannot be taken against activities carried out by a single entity, in this case the NHL. The decision to prohibit such moves was not anti-competitive as NHL teams were not "competitors in the economic sense" but rather "acting together as one single business enterprise". (42)

Relocation matters were also the subject of Mid-South Grizzlies v. NFL (43). The Grizzlies' was a football team from the World Football League (WFL), which was a competitor of the NFL before folding. Their application to join the NFL was rejected and the franchise argued that this came as punishment for playing for the competing league. The NFL cited reasons such as scheduling conflicts and Collective Bargaining Agreement (CBA) disputes. The Court ruled that this exclusion was actually pro-competitive, opening up a Southern market for other leagues wishing to expand and relocate teams.

However, on the opposite side of the argument, several practices and restrictive leagues' rules or decisions may be found in violation of the SAA. A well-documented and often cited case was LA Memorial Coliseum Commission v. NFL. (44) In this case (Raiders), the NFL had blocked an attempt by the Oakland Raiders to move to Los Angeles in order to avoid competition with the other NFL franchise already there, the Los Angeles Rams. Applying the rule of reason, the Court held that the ban was anti-competitive in helping to sustain local monopolies. The Raiders' move to Los Angeles would create, not eliminate, competition. "Ruinous competition" was not a valid defense (Raiders, 1395). At a later point a settlement was reached, with the NFL paying the Raiders $18 million. Under the same light, in NBA v. SDC (45), the San Diego Clippers wanted to "pull a 'Raiders'" and move to Los Angeles. The NBA actually allowed the move but nevertheless filed a suit seeking judicial confirmation for its rule requiring league approval before a league could relocate home games. The Court limited the previous "Raiders" scope, not laying an absolute ban on rules limiting franchise movements. The Court noted that leagues had property rights in league franchise sites, and that rules requiring league approval in relocation cases were lawful, unless applied unreasonably. As a result of "Raiders" and "Clippers", the NFL and other leagues amended their rules including certain types of objective standards to be applied when deciding upon a relocation proposal.

In Piazza v. MLB (46), the plaintiffs wanted to purchase the San Francisco Giants and move the team to Tampa, Florida. Major League Baseball (MLB) did not approve and they filed suit. The Court noted baseball's antitrust exemption on the reserve clause matter of the past (analyzed in the ensuing section), but made a very fine distinction between acquiring an existing team and creating a new one. Thus, the product market was the market for existing baseball teams rather than the professional sport generally. Subsequently, the Court ruled that the rejection to relocate was a restraint of trade and competition in the relevant market. The judge ordered further proceedings to explore the scope of the antitrust exemption, but a new trial never occurred, as Piazza settled for $6 million. MLB sold the franchise to Peter Magowan, who kept the Giants in San Francisco, for $15 million less than what Piazza originally had offered.

4. Antitrust scrutiny of transfer "windows" and acquisition deadlines

In a case much similar to the "Lehtonen" case analyzed in the EU section, transfer windows and acquisition deadlines were challenged under an antitrust lens in Bowman v. NFL. (47) Former WFL players were seeking employment in the NFL, which decided that a player or coach from a competing league could not sign with an NFL team after a set deadline. The NFL argued that the deadline was imposed in an effort to avoid upsetting the competitive balance among the NFL clubs as they entered the crucial period where divisional leaders were determined. The Court disagreed. It held that in the context of the WFL's recent demise, the deadline constituted a conspiracy to restrain competition for the plaintiffs' services. The Court had to show that public policy would support the issuance of the preliminary injunction; hence, in support thereof, it stated that "pro sports and the public are better served by open, unfettered competition for playing positions". (48) The league's rationale was further undermined by the fact the rules were not applicable to free-agents, thus discriminating against WFL's players.

5. Antitrust scrutiny of monopolization attempts and misuse of a dominant position

Closing this section of antitrust litigation, monopolization attempts and the misuse of a dominant position were brought forth in AFL v. NFL (49). The American Football League (AFL) alleged the NFL had a monopoly and misused it by seeking to locate new franchises in Dallas and Minneapolis, where the AFL had strong interests. The Court ruled the NFL did not have a monopoly power in the "relevant market", defined as "Metropolitan areas having a population in excess of 750,000 (31 cities)" (50), in which only 11 had NFL franchises. Furthermore, the Court rejected the charge the NFL had attempted to monopolize the industry and found that the NFL expansion simply implemented earlier plans to set up new franchises in other cities. Importantly, in the mid-1960s the NFL and AFL agreed to merge, primarily because the leagues' rivalry had led to a dramatic and economically damaging increase in players' salaries. (51) As the merger prima facie would eliminate all competition in the football industry, Congress amended the 1961 SBA granting the merger antitrust immunity. The merger took place in 1970.

In Philadelphia World Hockey v. Philadelphia Hockey Club (52), the reserve clause of the NHL was challenged not by the players but by the rival league, World Hockey League (WHL). Due to the fact the NHL lacked baseball's antitrust exemption, it was found to violate antitrust law and several teams from the WHL were admitted into the NHL. The WHL argued that NHL's reserve clause excluded other leagues from the professional hockey market by effectively cutting off the supply of proficient players.

In an interesting twist of the NFL-AFL merger, the American Basketball Association (ABA) and the NBA merged in 1976, even though a Court in Robertson v. NBA (53), held that the proposed merger would result in elimination of any competition within professional basketball, violating the Sherman Act. After lengthy Senate hearings and contingent upon a settlement with the players, the NBA and ABA were allowed to merge as planned. Oscar Robertson, John Havlicek, Bill Bradley, Wes Unseld, and nine other players received a $4.3 million settlement on April 29th 1976, as requested by Judge Carter. But that date was more important because it signified the NBA's acknowledgement of the players' union (NBPA). Thus, collective bargaining revisited the reserve clause, insurance and wage practices, and led the way to contemporary labor negotiations.

C. US Labor Law application in sport--The impact of antitrust challenges

I. Overview of sport labor evolution

It is intriguing to observe the litigation and Congressional intervention that led to the sport labor reality of the 21st Century in the US. Litigation moved by professional athletes was initiated from the early days of the 20th Century. In what was the most decisive case for years to come, baseball was ruled exempt from antitrust scrutiny in Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs. (54) Justice Holmes delivered the opinion of the United States Supreme Court, pontificating that "the business of baseball... should not be held as interstate commerce... as a firm of lawyers sending out a member to argue a case, or the Chautauqua lecture bureau sending out lecturers, does not engage in such commerce because the lawyer or lecturer goes to another State". Hence, because of the nature of sporting exhibitions, in this case the character of baseball games, antitrust law cannot be applied as it would in normal commercial business practices. The United States Supreme Court was called to affirm its 1922 position in Toolson v. New York Yankees (55), and Flood v. Kuhn (56). Although it consistently upheld baseball's antitrust exemption, in Radovich v. NFL (57) and International Boxing Club v. US (58) the United States Supreme Court ruled that the antitrust exemption enjoyed by professional baseball did not include other US professional sports, even though the characteristics of other team sports such as basketball, football, and hockey were almost identical.

Even after US courts had established that all other professional sports were subject to the antitrust laws, it was not until the early 1970s that antitrust suits against professional sports leagues were filed by disgruntled players or their unions in an attempt to remove various types of player restraints embedded in the leagues' own bylaws or uniform standard players' contracts. Through the 1970s, 1980s, and 1990s players and players' unions used the antitrust weapon in the court system with a substantial amount of success in order to gain leverage in negotiations with team owners for better working conditions. In fact, antitrust lawsuits have unquestionably been the primary reason why leagues were eventually willing to enter into CBAs. (59) Historically, the primary impediments to the free movement of US athletes that have been challenged are the "reserve" and option clauses combined with the "tampering rule", the right of first refusal, and the draft system. Recently, the most highly debated restraints are forms of wage-fixing such as "salary caps", or a "luxury tax".

1. The reserve system

Originally, the reserve system had been developed in the 1880s in professional baseball as a preventive measure against clubs from competing leagues from "stealing" players. A typical reserve clause would give the club the exclusive right to "reserve" a player, i.e. prolong unilaterally his contract upon expiry. The player could not oppose the clause, even if he wanted to sign for another club. In reality, the club could hold on to a valuable player his entire career by making use of the reserve clause time and time again whenever the contract was at its end. The reserve clause proved to be the most effective way to prevent players from becoming "free-agents", who can unrestrictedly negotiate and sign a new contract. In earlier types of reserve clauses, the clubs could exercise the right of renewal and even at their own discretion cut the player's salary by 10-25% of that provided for in the original agreement. (60)

In 1971, at the outset of Senate hearings on the merger of the two professional basketball leagues, Senator Sam Irvin of North Carolina made this thought-provoking comparison:

Many years ago the term "chattel" was used to denote the legal status of slaves. That is, they were considered a type of chattel, which was owned as a piece of furniture, as livestock was owned. This use of the term "chattel" applied to human beings and the condition it stands for is so abhorrent that we don't even like to acknowledge it ever existed. Yet, in a real sense that is what these hearings are about today modern peonage and the giant sports trusts. (61)

2. Option clauses, the "Rozelle" and "tampering" rules

Unlike the reserve clause, the option clause would give the club the right to renew the contract for one additional year. After the player played out his option year he would theoretically be considered an unrestricted free agent. However, this free mobility was seldom realized. Typically, the option system would be combined with an interleague rule informally known as the "Rozelle Rule", named after former NFL Commissioner Pete Rozelle, who was elected to set the compensation to the former club for a free agent in Mackey v. NFL (62). The Rozelle Rule would require a club signing a free agent to compensate the original employer. This compensation might consist of the transfer of future draft rights, the assignment of the new employer's contract rights in other players, or money. This in fact lessened the willingness of other teams to deal with a free agent and increased the likelihood the free agent would stay with the original employer. (63) The reserve and option clauses could be combined with another rule, the "tampering rule", according to which other teams were prohibited from negotiating or making an offer to a player whose rights were held by another club, or risk the League's Commissioner's sanctions.

3. The Right of First Refusal and Compensation system

The Right of First Refusal (ROFR) modified the option clause in some professional leagues by the late 1980s, usually termed as ROFR/Compensation (ROFR/Comp). The prior team could "match" any offers made to a free agent and retain the rights to the player. If the prior team chose not to "match" the offer, the player could sign with the new team, but the prior team would still have to be compensated, pursuant to the Rozelle Rule. Procedurally, the difference between the ROFR and the Rozelle Rule was that the compensation was determined by a formula instead and not by the Commissioner's discretion. As the compensation for virtually all players was computed to be two first-round college draft choices, only two players subject to the ROFR/Comp system changed teams in over a decade between 1977 and 1988, and only one free agent player from 1982 to 1987 even received an offer from another team. (64)

4. The Draft system

The Draft system was designed to promote and maintain competitive balance among teams. Once a club has drafted a player, it has the exclusive right to contract with him/her. The duration of this right varies among leagues; in few leagues it lasts until the next draft is held, but in most leagues the clubs reserve the perpetual right to negotiate with the drafted player. (65) In these situations, the drafting club continues to enjoy exclusivity even though no contract was entered into, even if the player spends several years in another league or some other endeavor.

5. Salary caps and luxury tax

The single most controversial issue in US professional sports in the last 10 years involves fixed restrictions on player salaries via "salary caps", or a "luxury tax" penalizing a team spending more than the amount allowed for salaries. The NBA and the NFL have extremely comprehensive salary caps. Recently the NHL followed suit, with the ratification of the new NHL CBA on July 22, 2005. Challenging such restrictions, there have been extensive labor strikes in the NHL and the MLB. The latter's current CBA contains a luxury tax. The whole idea is to reduce the salaries of the superstars and/or diminish the ability of clubs to overbid one another. Salary caps feature a number of general concepts such as definition of gross revenues, the league calculation of the cap, calculation of a cap per team, league-wide minimum salary (hard v. soft caps), and a number of exceptions and possibilities (such as the NBA's "Larry Bird" exception, re-signing one's own player exceeding cap space, and severe penalties for teams that wish to circumvent caps). Case law on such matters includes: Robertson v. NBA (66), White v. NFL. (67)

II. The baseball anomaly

So that this investigation contributes to the realization of sport labor peculiarities and the unique handling of matters by the courts, further analysis of the cases that shaped the world of sport is necessary. Developing an understanding of how US labor relations in sport developed through litigation and policy intervention offers useful lessons, which may be juxtaposed with similar progress in the EU the past thirteen years. In this process a modernization of sport policies and labor practices can be pursued, and contemporary realities may be served. To that end, an examination of the "baseball anomaly" (68) is the first important stop.

In 1876 the National League of Professional Baseball Clubs was formed. "Federal Baseball" (as the landmark United States Supreme Court decision in 1922 is often termed) arose out of a conflict between the two then competing baseball leagues, the Federal League and the American/National Leagues (AL/NL). The plaintiffs alleged that the AL and NL, enforcing their reserve clauses, prevented the Federal League from obtaining quality ball players and becoming a financial success. The United States Supreme Court did not find it necessary to consider the merits of the case, based on the rather feeble assumption (69) that the activities of organized baseball did not even fall within the scope of the Sherman Antitrust Act. Quoting Justice Holmes: "Baseball exhibitions constitute 'business', which is not the same as 'commerce' in the context of the Sherman Act ... Personal effort not related to production is not a subject of commerce... The Leagues must induce free persons to cross state lines, but this transportation is a mere incident, not the essential theme..." Therefore the United States Supreme Court rejected that baseball engaged in inter-state commerce or trade.

In the late 1940s baseball's antitrust exemption had also been challenged in Gardella v. Chandler (70). As a result of signing with a rival baseball league in Mexico, Commissioner Chandler had suspended 18 players including Gardella and had refused to reinstate them as eligible players in the league. At the trial, Gardella alleged that the reserve system and the blacklisting of him and other players violated the antitrust laws. He lost in the District Court due to baseball's exemption in "Federal Baseball", but the Appellate Court reversed and remanded the matter back for trial on the allegation raised by Gardella. However, for economic reasons on the part of Gardella, and for fear of jeopardizing the antitrust exemption on the part of the baseball league, the parties settled out of court. (71)

In Toolson v. New York Yankees (72), after reviewing the evidence, the United States Supreme Court affirmed its earlier ruling in "Federal Baseball", based on two -different- arguments. First, Congress had the "Federal Baseball" ruling under consideration and had not considered it fit to bring the business of baseball under the antitrust laws (somewhat ironic, as the United States Supreme Court, abiding by the principle of "stare decisis", applied precedent expecting legislative action by Congress, and the latter waited for a reconsideration by an updated United States Supreme Court decision). Secondly, the Court relied heavily on the fact that due to the ruling in "Federal Baseball" the baseball industry had 30 years to develop on the understanding that it was not subject to existing antitrust legislation ...

Despite the open invitation for Congress to intervene after "Toolson", no bills were passed by Congress to rectify the apparent anomaly in professional baseball. The next major attack upon the baseball exemption was brought in 1970 by Curt Flood. After the end of the 1969 season, Curt Flood, who in an excellent career had been recognized as the best centerfielder in the National League seven seasons in a row, was traded from the St. Louis Cardinals to the Philadelphia Phillies without any prior consultation and against his expressed wishes. Flood objected to the trade -and the additional pay cut- but Commissioner Kuhn rejected his plea, after which Flood filed suit alleging that the reserve clause violated the Sherman Act. For the second time the United States Supreme Court affirmed the antitrust exemption in "Federal Baseball", but was fully aware of the inconsistency compared with other team sports. The Court noted on that respect (73):

If there is any inconsistency and illogic in all of this, it is an inconsistency and illogic of long standing that is to be remedied by the Congress and not by this court... If we were to act otherwise, we would be withdrawing from the conclusion as to congressional intent made in "Toolson" and from the concerns as to retrospectively therein expressed. Under these circumstances, there is merit in consistency even though some might claim that beneath that consistency is a layer of inconsistency. (74)

In the mid-1990s the United States Congress held a number of hearings regarding the anti-trust exemption of professional baseball. In late 1998 (76 years after "Federal Baseball") both houses of Congress unanimously passed the Curt Flood Act of 1998 and forwarded the bill for presidential signature. Both the MLBPA (players' union) and the MLB encouraged Congress to seek removal of the exemption in this particular context, relating to labor maters. Thus, MLB players would enjoy the same rights as other professional athletes. The labor relationship in professional baseball at the Major League level (only) would follow the enactment of the Curt Flood Act (CFA) and be subject to collective bargaining.

It is important to note that the CFA only provided for extension of the antitrust laws to the narrow area of activity "directly relating to or affecting employment of Major League baseball players at the Major League level" (75). Hence the Act does not extend antitrust law coverage to baseball matters such as the amateur draft and Minor Leagues' reserve clauses.

Despite the CFA of 1998, "old habits die hard". (76) In MLB v. Crist (77), in regard to the legitimacy of MLB's decision to reduce the total number of its clubs from 30 to 28 for the 2002 season, the Court concluded the following in terms of baseball's special status:

The death of the business-baseball exemption would likely be met with considerable fanfare, save for the club owners who benefit from the rule. The exemption was founded upon a dubious premise, and it has been upheld in subsequent cases because of an equally dubious premise. Moreover, the welfare losses stemming from the potentially anti-competitive agreements among pro clubs have been well documented... Even so, we believe that a good faith reading of Supreme Court precedent leaves us no choice but to conclude that ... contraction is a matter that falls within the "business of baseball" and therefore cannot be the subject of a prosecution based on federal antitrust law (78).

Hence, for this particular matter the Court applied prior United States Supreme Court precedent and not the CFA of 1998. On the subject of free agency, the MLBPA won a surprising victory in the Seitz arbitration ruling of 1976. The 1973 MLB CBA had witnessed the birth of neutral salary arbitration and a mechanism under which a 10-year veteran could veto suggested trades. Players Andy Messersmith and Dave McNally brought a case before arbitrator Seitz, who -surprisingly after 50 years of antitrust litigation to the contraryruled that the reserve clause from a contractual point of view had never been agreed upon, making the players free agents upon expiry of their contracts. Having agreed to binding arbitration, MLB was not able to reverse Seitz's ruling. (79)

III. Labor developments in other sports

The situation in other US sports and entertainment businesses was different, i.e. U.S. v. Schubert (80), U.S. v. International Boxing Club (81). Both in "Schubert", concerning the legitimacy of theatrical producers' booking and production activities, and "IBC", concerning promoters of professional boxing bouts, the United States Supreme Court rejected the argument that "Federal Baseball" immunized all public exhibitions, observing that "Toolson" did "not necessarily reaffirm all that was said in Federal Baseball". So, in 1955, the United States Supreme Court made it clear that the baseball exemption was special, and not a general standard for the entertainment and sports industry.

In "Radovich" (82), the plaintiff, who had played with the Detroit Lions, moved to a rival league and played there for two years. When he later sought a player/coach position with an NFL club, he found himself blacklisted for breach of contract with his previous club and filed an antitrust claim. The United States Supreme Court was well aware of the practically non-existing distinction between baseball and football; nevertheless, the Court quoted the language used in "Schubert" and "IBC", and stressed the fact that no other team sport but baseball could legitimately have relied on the antitrust exemption in "Federal Baseball" and "Toolson". Since "Radovich" the courts have consistently applied the Sherman Act to all other types of US sports and entertainment activities: [Basketball] Haywood v. NBA (83), Robertson v. NBA (84); [Hockey] Philadelphia World Hockey Club v. Philadelphia Hockey Club (85); [Tennis] Heldman v. USLTA (86), Drysdale v. Florida Team Tennis (87), Gunter Harz Sports v. USTA (88); [Golf ] Dessen v. PGA (89), Blalock v. LPGA (90); [Soccer] NASL v. NFL (91).

IV. The Antitrust Law labor exemptions

1. Statutory labor exemptions

Finally, the antitrust exemptions encountered through labor law are of instrumental importance for such litigation and policy. The first source of exemption from the antitrust laws for certain labor-related activities was the Clayton Act of 1914 (92). The United States Congress added a section in order to restrict the ability of the courts to apply the Sherman Act anti-competition prescription against union organizing activities. Thus, Section 6 of the Clayton Act expressly declares that the labor of humans is beyond the reach of antitrust law. Therefore, since "the labor of a human being is not a commodity or article of commerce" (93), player rules that restrain the sale or employment of the labor of athletes, are prima facie not a restraint of trade in interstate commerce.

The Norris-La Guardia Act (94), which was passed in 1932, precluded federal courts from issuing injunctions in labor disputes, except in cases involving unlawful destruction of property, or where authorities were unwilling or unable to protect the property. Players or unions seeking to enjoin or declare player restraints illegal, such as the draft or the reserve clause, could argue that the Norris-La Guardia Act, like Section 6 of the Clayton Act, protects union activity, but not employer activity.

The National Labor Relations Act (NLRA) (95) extracts a duty on both employers and unions to bargain in good faith over certain mandatory subjects of bargaining, rather than resorting to government interference to settle the dispute. In contrast to the Clayton Act, no strong reference of expressed antitrust exemption was included in the NLRA. However, cases where a CBA itself may be an alleged violation of antitrust law are not covered by the express statutory exemptions. In order to resolve this apparent conflict between antitrust and labor law, the United States Supreme Court developed what is now commonly referred to as the "non-statutory labor exemption".

2. Non-statutory labor exemption

The United States Supreme Court reached this important legal fiction in two cases decided on the same day in 1965, the "Jewel Tea" and the "Pennington" cases (96). Both involved antitrust challenges by third parties to CBAs made by unions and employer groups. The application of the non-statutory labor exemption led to two different results. In "Pennington" the Court held that although a union had an implied non-statutory labor exemption from the antitrust laws to enter into labor agreements with a multi-employer bargaining group, the union had forfeited its protection by agreeing to pursue anti-competitive interests of the employer group (the content of the CBA was deemed to have a ruining effect on other smaller mining companies). By contrast, however, the United States Supreme Court in "Jewel Tea" applied the non-statutory labor exemption to a CBA that was designed to protect the interest of employees by limiting late night hours. In "Pennington" the agreement required the union to force certain terms on other employers outside the multi-employer bargaining unit who, thus, had no input into the bargaining process. In "Jewel Tea", the plaintiff was simply a dissident member of the multiemployer bargaining group that forced the union to impose the same hourly restrictions on other grocers.

The factual context in which the non-statutory exemption has been applied other than in sports cases is limited to where a product market competitor of an employer, who is in the same bargaining unit as the employer, challenges a CBA between the employer and its union as a section 1 antitrust conspiracy to restraint the product market in which both employers compete. This factual context has never been presented in a sports case, yet mysteriously it is to Jewel Tea and not Clayton and Norris-La Guardia that the courts have looked for guidance in the key sports cases. (97)

3. Labor exemptions application in sport

a. Impact of CBA--The "Mackey test".

The labor exemptions found application in the sport context of Mackey v. NFL (98), when eight union sponsored players challenged the "Rozelle Rule". In this case, the "Mackey test" developed and is applied since in relevant sports cases. Under the test, the antitrust exemption could be invoked by a league only when:

1. Restraint of trade primarily affected the CBA parties

2. Agreement fought to be exempted concerned a mandatory subject of bargaining, and

3. Agreement was the product of arms length bargaining

In the particular case, the Court found that the third element was lacking, hence no league protection via the labor exemption. Before "Mackey", the courts had ruled in several cases that the labor exemption could not be used by the employer side, i.e. the teams, with reference to the CBA, as no evidence had been presented to substantiate that the challenged regulations and restrictions had been the subject of serious arms length collective bargaining. (99)

The alleged restraint of trade was solely on the labor market in which the clubs employed the players. The NFL argued that besides being stated in each NFL player's standard contract, the Rozelle Rule had also been authorized by the Players' Union (the NFLPA) in the 1970 CBA, thus exempt from antitrust attacks. The Court ruled the statutory exemption applied only to protect union activity. However, the non-statutory labor exemption could be used to protect employer conduct, only if that conduct was authorized in a union-employer agreement. The Rozelle Rule had not been "bargained over". The NFLPA was in weak position and the rule simply continued provisions that had been unilaterally imposed by the owners.

Also, in Smith v. Pro Football (100), the plaintiff challenged the NFL draft, which had not been incorporated into a CBA. The Court held that even if it could be established that the draft had been included in the CBA, a trial would be necessary on the issues of whether the restriction was thrust upon a weak players' union.

In contrast to "Mackey" and "Smith", the courts concluded that the player restraints in "McCourt" (the league's reserve system) and in "Zimmermann" (the NFL supplemental draft) had been the result of good faith arms length bargaining. (101) In "Wood" [Wood v. NBA, 809 F. 2d 954 (2nd Cir. 1987)], a rookie player claimed that the salary cap and the college draft were violations of the antitrust laws and that he was not an employee at the time the CBA was made. Thus Wood claimed that the non-statutory labor exemption should not apply to him. The Court refused the argument and held he was bound by the previous decisions made by his older player-colleagues. The same conclusion was reached by the 2nd Circuit in "Clarett" recently, where a former Ohio State football player challenged the NFL policy not allowing college athletes to declare for the NFL draft unless they were three years at least separated from the graduation of their senior year in high school. (102)

b. Post-CBA expiration and post-impasse labor exemption application.

What was not answered per se in the Mackey decision, however, was whether the antitrust labor exemption survives the expiration of a CBA, thus allowing employers to unilaterally impose restrictive practices upon a union. In footnote 18 of the "Mackey" decision the Court left the issue open to interpretation, something that dominated antitrust sports law cases in the late 1980s and the 1990s. Would the exemption survive the expiration of CBAs, if so for how long, did it cover just the exact same terms that had been previously bargained or would it cover unilaterally implemented new terms by the league after impasse (dead end in negotiations after both parties bargained in good faith as described by the NLRA)?

In "Bridgeman" (103) the Court held that the exemption would not survive the expiration of the CBA, but it would protect the terms that were in place until the time that team owners could not "reasonably believe that the practice or a close variant of it would be incorporated in the next CBA". Hence, with a somewhat unfortunate decision, the Court assumed "the reasonable employer test", featuring numerous logical and practical flaws. Why should the antitrust rights of the plaintiff depend upon the beliefs of the antitrust defendant? No other court since adopted the reasonable employer test. (104)

One year after "Bridgeman" the District Court in "Powell" reconsidered this issue. (105) In 1989 the NFL CBA expired. The NFL maintained the status quo on all mandatory subjects of bargaining. After fruitless negotiations the players filed suit. The District Court agreed with the NFL that the exemption would survive the CBA, however the non-statutory labor exemption had expired at the time the owners and players reached the point of impasse, after bona fide bargaining toward a new CBA. On appeal the 8th Circuit overruled the District Court opinion. As long as the player-team relationship was governed by the NLRA it would survive even the point of impasse, as long as players were represented by a union, unless the owners committed serious unfair labor practices.

So instead of going on strike, or filing an unfair labor practice complaint with the National Labor Relations Board (NLRB), the NFLPA selected the decertification of their union, in a priceless and timeless lesson of legal strategy. (106) The "new" NFLPA was reconstituted as a trade association with the stated goal of supporting players' effort to gain free agency through all means other than collective agency. Eight players thus filed suit against the NFL, in McNeal v. NFL (107), claiming that the league's ROFR/Comp system was in violation of the antitrust laws. Even though the NFLPA looked exactly like it did a day before decertification, the Court concluded that the union was no longer part of an ongoing collective bargaining relationship, and therefore the NFL was not allowed to invoke the non-statutory labor exemption as a defense.

To avoid similar surprises, other leagues filed suits, as "pre-emptive strikes". Before the expiration of the CBA, the NBA filed suit in NBA v. Williams (108) seeking a declaration that the salary cap, the ROFR, and the college draft would continue to be immune from antitrust scrutiny. Both the District Court and the 2nd Circuit extended the protection reached in "Powell". The Appellate Court even adopted a new, broad, and pro-employer approach, suggesting that the exemption would protect not only terms from the old agreement that the owners maintained post-expiration, but also new terms unilaterally implemented after bargaining impasse, as employers were permitted to do under labor law provisions, provided they had engaged in bona fide bargaining under the NLRA.

In the mid-1990s the United States Supreme Court ruled in favor of the employers in Brown v. Pro Football (109). A number of players had filed suit after impasse, claiming that the NFL's $1,000 per week wage rate for young players who failed to secure a position on the regular team roster violated federal antitrust law. In an 8-1 decision, the United States Supreme Court affirmed the decision of the Appellate Court, agreeing that the exemption continues for as long as the parties have a bargaining relationship, even for terms unilaterally implemented by team owners post-impasse.

D. US Competition and Labor Law applications in sport summary

Recapitulating the section devoted to US Competition and Labor Law applications in sport, one may reach several conclusions that are useful before an analysis of the contemporary situation evolving in EU sport:

* In the "amateur" section of US sport, the NCAA has enjoyed relief from antitrust scrutiny, with the exceptions in "Board of Regents" and "Law". In this way the observer of law and policy may reach the conclusion that restrictive practices such a voluntary association adopts are reasonable and even necessary for the association to pursue its purposes. Any policies, however, that entail business practices affecting third parties and not the regulatory framework which members institutions have to abide by, may come under antitrust scrutiny, rendering the association a commercial business venture.

* Frequently Congress has intervened attempting to resolve situations in sport that courts declined or were unable to provide remedy for (or in certain cases deciding to bypass or alter court decisions, satisfying either public demand or succumbing to major corporate interests), i.e. the SBA of 1961 allowing sports leagues to pool broadcasting rights and sign exclusive contracts, or the CFA of 1998, providing relief for a situation that evolved the 76 years following the "Federal Baseball" case that granted baseball its infamous--according to aforementioned legal scholars--antitrust exemption. Such intervention arguably protected the interests of individual sport laborers, to that point treated unfairly and not enjoying privileges other employees in other business sectors normally enjoy. At the same time, such policy initiatives also allowed for the continuation of sports leagues development, rendering the operation of sports franchises feasible for investors.

* Promoting competitive equity and balance among participating teams and athletes is a major purpose of all sports organizations. In such a manner, practices that would otherwise be declared inherently anti-competitive find a sporting rationale and pass antitrust muster (e.g. broadcasting restrictions, draft systems, salary caps, luxury tax).

* Several major sports leagues' practices have been declared violations of antitrust law (cross-ownership restrictions, relocation restrictions, transfer windows, and acquisitions deadlines) under SAA [section]1. SAA [section] 2 claims in regard to monopolization and the misuse of a dominant position have been harder to prove. It is difficult to establish a monopoly claim in sport settings.

* Even though on strict business law terms restrictive practices such as the "reserve" or "option" clauses, the "tampering" or "Rozelle" rules, or the ROFR/Comp system appear to make no legal sense, they did pass legal scrutiny in the early days of professional sports development in the US.

* Players unions that wish to uphold players' rights can only bargain for them in good faith with employers in CBA negotiations. After a series of court decisions in "Powell" and "Williams", the employers' side received the benefit of the doubt in relation to antitrust protection of rules unilaterally implemented for the survival of the league and the game.

* Under the "Mackey test" and considering the obligations employers have under the NLRA, unions may still pursue the negation of a restrictive practice; as a last resort they always have the "nuclear option" of union decertification.

E. EU Competition Law application in sport

I. Competition Law theory

The competition rules in the EC Treaty (110) aim at promoting a competitive market economy and preventing barriers to integration of the single European market. Article 3 (g) ensures a system that does not distort competition. Article 81 (1) creates and sustains that system:

The following will be prohibited as incompatible with the Common Market: All agreements between undertakings, decisions by associations of undertakings, and concerted practices which may affect trade between member states, and which have as their object or effect the prevention, restriction, or distortion of competition within the Common Market.

Hence, the EC Treaty provides for no cartel agreements leading to anti-competitive effects. Article 81 (2) renders all agreements or decisions under (1) void.

Article 81 (3) provides:

... [E]xceptions for practices which contribute to improving the production or distribution of goods or promoting technical or economic progress while allowing consumers at a fair price access to the resulting benefit and which (a) do not impose restrictions on the undertakings indispensable to the attainment of the objectives; (b) do not afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

In this way the EU assumes a "sui generis" community rule-of-reason. (111) Article 82 declares:

Any abuse of one or more undertakings of a dominant position within the common market or in substantial part of it shall be prohibited as incompatible with the Common Market in so far as it may affect trade between Member States. Such abuses include:

a) Price-fixing or unfair trade conditions

b) Limiting production or technical development

c) Applying dissimilar conditions to equivalent transactions with other trading parties, placing them at competitive disadvantage

d)Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which by their nature or according to commercial usage have no connection with the subject of such contracts.

There are no exemptions, provided the three elements to breach Article 82 are met:

a) a dominant position

b) abuse of that position, and

c) effect on inter-member trade caused by the abuse.

Examples of monopolization in terms of business practices are found in Hoffman-LaRoche v. Commission (112). Hoffman--La Roche controlled 80% of the relevant vitamin market, which was found to be an exploitive and anti-competitive abuse. On the other hand, United Brands v. Commission (113) established the meaning of dominance in a relevant market. United Brands (UB), marketing Chiquita bananas, handled 40% of EU bananas trade. The Commission defined the market as bananas, whereas UB argued for the broader "fresh fruit" category, in which there would be no monopoly. The ECJ sided with the Commission, leaning toward a unique market "due to particular consumption by young, old, and sick".

There is no per se exemption at Article 81 (3) of the EC Treaty for economic activities in sport. In a February 1999 EC policy statement (114), purely sporting activities were distinguished from commercial ones to which EC competition law would apply. This policy entailed general principles applying EU competition law to sports:

--Safeguarding the general interest in relation to the protection of private interest

--Restricting competition action to cases of Community interest

--Applying the so called "de minimis" rule, according to which agreements of minor importance do not significantly affect trade between member states

--Applying the four authorization criteria laid down in Article 81 (3) of the EC Treaty, but also refusing an exemption to any agreement which infringes other provisions of the EC Treaty and in particular freedom of movement for sportsmen

--Defining relevant markets pursuant to the applicable general rules

--Adapting to the features specific to each sport.

Deputy Director General of Competition Directorate of EU Commission JF Pons, on October 14, 1999, clarified the rationale and in a way defined the application of the "socio-cultural" model of sport in the new era of commercialization. Pons emphasized the following points:

* There should be no premature drop out of teams, promoting solidarity and equality, as well as the uncertainty of results

* The social activity by millions of amateurs involves the expectation of top-bottom distribution of revenue

* ISFs regulate and may involve economic activities

* Commission distinguishes between compliance with Competition policy and requirements of sports policy

* Commission attempts to prevent restrictive practices of sports organizations with significant economic impact that are unjustified in the light of the goal of improving the competition and distribution of sports events, or in reference to the specific objectives of a sport. It will, however, accept practices that do not give rise to problems of competition, as being inherent in the nature of sport, necessary in the organization of it, or justified

* Bearing in mind the difficulty of pinpointing the character of sporting activity, gradually and on a case-by-case basis the Commission and/or the ECJ will clarify rules inherent in sport or necessary for competition.

Pons (1999) mentions he would not be surprised if in the future the following fall outside the scope of article 81 (1) of the Treaty:

* Rules of the Game

* Nationality clauses in competitions between teams representing nations

* National quotas governing the number of teams or individuals per country participating in European and international competition

* Rules for selection of individuals on the basis of objective and nondiscriminatory criteria

* Rules setting fixed transfer periods for the transfer of players, provided they achieve some balance in the general structure, or

* Rules needed to ensure uncertainty as to results, where less restrictive methods are not available.

Articles 86, 87 et seq. of the EC Treaty govern state aid administered to sports clubs. This becomes very important, introducing policy in the EU member states that allows governmental debt relief via a sociocultural approach. Recently clubs in France (Paris, Bordeaux), Spain, and Greece (AEK, Aris, PAOK, et al.) fell within such "special liquidation" policies (115), as a "measure designed to assist education and initial training, and as such constituting an educational or comparable scheme". (116) Thus, it becomes apparent that the "socio-cultural" approach differentiates the handling of certain sport activities from pure commercial enterprises. Especially in times of dire financial straits for historic European sporting clubs, the states have been able to intervene and provide special resolution. (117) This special resolution oftentimes is argued to be contradictory to state constitutions, state common and civil laws, even EU community mores and business laws. (118) But the socio-cultural norm as expressed by EC policy at this point appears to allow for such special legal and financial management of relevant cases. Needless to say, in a purely commercialized sporting world such as the one in the US professional leagues, no justification would be possible. When sporting organizations in the US have had financial hardship, there was no way to establish governmental intervention to save the struggling clubs or leagues. Unless there was an issue such as the ones rectified by the SBA of 1961 and the CFA of 1998, essentially providing remedy for both team owners and players to operate in a healthy and feasible business environment, Congressional intervention would not step in and save e.g. the Women's United Soccer Association (WUSA) or professional leagues' competitors from economic extinction. One may argue that the threat of professional sport franchises departing from their host cities in the US creates a burden for financial subsidy of new facilities via public monies. This assumption, however, would need further exploration.

II. Competition Law application in sport

1. Competition Law scrutiny of broadcasting restrictions

a. Collective selling of broadcasting rights.

It is useful to investigate particular Competition Law issues as they are found in EU sport to juxtapose their legal resolution and handling with respective US cases. For example, in regard to sports broadcasting, the collective selling of sport broadcasting rights is considered restricting competition based on the following reasons (119):

1) Price-fixing

2) Limited availability to rights

3) Market position of stronger broadcasters is strengthened, being the only operators able to bid for all the rights in one package.

However, there have been cases of a pro-collective sale of rights stance to protect the financially weaker clubs, such as the one decided by the Restrictive Practice Court (UK, Premier League, July 28, 1999). The Court's handling was also possible under a rule-of-reason test. Through a pragmatic-public interest approach, the Office of Fair Trading lost to the Premier League, pooling TV rights, owning a unique product by all its clubs, unlike a cartel of producers of a homogenous product, where cooperation removes incentives to innovate or compete on price and quality. (120)

On the same matter, in 1999 UEFA notified the EC of regulations regarding the bundle of exclusive rights to the Champions' League, for up to four years to a single national broadcaster (usually free TV), normally sub-licensing to a pay TV channel. On July 19, 2001, the EC sent objections to UEFA, using the reasoning that huge prices drive competition away, and deter new technology. In 2003, UEFA assumed a new plan and on July 24, 2003 the EC reconsidered, pursuant to the following justifications:

* Gold and Silver rights packages options

* Exclusive right to sell remaining games (Bronze package) by cut-off date or individual clubs may use the right to negotiate themselves

* UEFA and clubs can exploit internet or cell phone avenues [Universal Mobile Telecommunications System (UMTS) technology], and

* Maximum period of pool is three years via public tender procedure in open bidding.

In a recent development on the issue, on December 16, 2003, the EC reached an agreement with the Premier League in the United Kingdom. The latter was advised to amend its practices allowing more transparent bidding for the Premiership soccer games, instead of renewing the exclusive contract with Rupert Murdoch's Sky TV (B-SkyB). In early September 2005, the Premiership was given three weeks to respond to the EC on ways to implement new broadcasting contracts (121). In a more representative bidding process, B-Sky-B was expected to receive most games' rights. The Irish pay-TV operator, Setanta, however, secured two of the six available packages (Harris, 2006).

Some background on exclusive licensing involves 1991 and 1993 ECJ decisions on the European Broadcasting Union (EBU) organizing the popular European Song Contest, which was deemed too restrictive, not allowing others to bid. (122) Improvements to the EBU plan were granted until 2005. In close relation, one observes the British Monopolies and Merchants Commission's (MMC) decision refusing Rupert Murdoch's 623 million [pounds sterling] bid for Manchester United as B-Sky-B owned the Premiership's broadcasting rights and would have the other end of the table in broadcasting negotiations as well. The MMC was not assured that the deal would not influence present and future broadcasting agreements. (123)

b. Anti-siphoning provisions.

In regard to anti-siphoning regulations in the 1980s and 1990s there was increased privatization and involvement of commercial media partners. Recently Prismas (FIFA's media partner) paid for World Cup games (as a member of BRD Kirch Group) $1.8 billion for 2002 and 2006. Approximately $450 million were paid for each cup final game. Hence, EC policy forecasting potential developments assumed the "Television-Without-Frontiers" initiative. In its article 3A, there is the mention of "important events for society" that should remain available on free TV. As of September 2005, only Austria, Germany, Italy, and the UK had submitted lists of nationally important events. (124)

2. Competition Law scrutiny of monopolization attempts and misuse of a dominant position

In terms of monopolization attempts and the misuse of a dominant position, the Formula One case provides useful insight, especially in regard to SINGOs/ISFs separation of regulation and promotion functions. In the International Automobile Federation (FIA) case the EC suggested that a governing body of sport needs to separate its regulation of the sport from its commercial activities in promoting events and in maximizing their commercial value; a governing body must not use its regulatory functions improperly to exclude its commercial rivals from the sport (125). The history of the matter was that FIA prevented rival promoters from setting up events. It refused to license rival promoters, competitors, and events. It would ban drivers who competed in rival events. FIA insisted that circuit owners grant exclusive use of their tracks. It would penalize broadcasters if they showed rival events. The Commission convinced FIA to separate the regulatory from the commercial function, preventing conflicts of interest. As scholars note, there is a very different handling of motor sports (commercialized global sport) when compared to soccer (internationalized sport). (126)

What is important to note at this point (self-regulation of sporting organizations) is that the Commission "does not care about sporting rules", (127) "Rules without which sport could not exist should not--in principle- be subject to EU Law application. Sporting rules applied in an objective, transparent, and non-discriminatory manner do not constitute restrictions of competition". (128) The elements emphasized by Commissioner Monti-objective, transparent, and non-discriminatory-are the main areas where EC intervention and ECJ decision-making may promote a "socio-cultural" approach. Promoting these elements may entail preempting certain acceptable business practices. At the same time, the operators of sport organizations attempt to find ways under which restrictive practices may be upheld, considering the unique nature of the sport industry. On this matter, the ECJ rejected that sporting bodies have a clear immunity even over the rules of the game, and they have to satisfy basic legal safeguards, such as non-discrimination and rational decision-making criteria. These issues have been deciding factors in sport labor related cases, with the seminal one, shaping the world of modern EU sport, being "Bosman".

F. EU Labor Law application in sport--Bosman et al.

I. Sport labor evolution

1. Pre-Bosman

Before examining the impact of Union Royale Belge des Societes de Football Association, Royal Club Liegeois, UEFA v. Bosman (129), in short "Bosman", frequently termed as the "bombshell" in European sports law and policy, it is necessary to investigate the legislative history behind it. In C-36/74 Walrave & Koch v. Union Cycliste International et al (130) ("Walrave"), Dutch motorcycle pacemakers wanted to work for other than Dutch teams. The ECJ pontificated:

Having regard to the objectives of the Community, the practice of sport is subject to Community Law, only in so far as it constitutes an economic activity within the meaning of Article 2 of the Treaty ... The prohibition on discrimination based on nationality contained in Articles 7, 48, and 59 of the Treaty does not affect the composition of sports teams, in particular national teams, the formation of which is a question of purely sporting interest and as such has nothing to do with economic activity.

Article 39 (48) extended to collective regulations of gainful employment services, supported by Article 7 (4) of Counsel Regulation 1612/68, prohibiting nationality discrimination in agreements and collective regulations concerning employment. The abolition of obstacles to freedom of movement (131) would be meaningless if such barriers were replaced by obstacles imposed by Associations not subject to public law. The latter brought private sports organizations within the realm of community law. (132)

In Dona v. Mantero (133) ("Dona") an agent wishing to recruit players abroad targeted restrictive nationality clauses. The Court ruled that:

Rules or a national practice, even adopted by a sporting organization, which limit the right to take part in football matches as professional or semi-professional players solely to the nationals of the state in question, are incompatible with Article 7, and as the case may be, with Article 48 to 51 or 59 to 66 of the Treaty, unless such rules or practice exclude foreign players from participation in certain matches for reasons which are not of an economic nature and context of such matters are thus of sporting interest only.

The imprecise language in regard to EC Treaty provisions' application in sport in "Walrave" and "Dona" may very well have been one of the reasons why very little was done to prevent continued discriminatory practices in European sport after 1976. (134) Thirteen years after "Dona", attempting to rectify such ambiguity and uncertainty governing the sport industry, and especially European soccer, the Commission and UEFA reached a "gentleman's agreement", introducing the "3+2 rule" (club teams could use three non-nationals and two assimilated players who had played in that country for five years without interruption, including three years in junior teams).

UNECTEF v. Heylens (135) ("Heylens") dealt with discrimination of a Belgian football trainer, holding a Belgian diploma, employed by Lille, in France. In order to practice the occupation of football trainer in France, a person must be the holder of a French license, or a foreign one which has been recognized by the state. Heylens' application was rejected without cause. The ECJ recognized that in the absence of harmonization of the conditions of access to a particular occupation, the member states were entitled to lay down the knowledge and qualifications needed in order to pursue it and to require the production of a diploma certifying that the holder had the relevant knowledge and qualifications. However, in order for the national state to exercise the right of rejection, the person concerned had to be given the opportunity to ascertain the reasons for the decision, which was not the Heylens case. Similar cases include: Thieffry v. Conseil de l'Ordre des Avocats a la Cour de Paris (136); Ordre des Avocats au Barreau de Paris v. Klopp (137); Ramrath v. Ministre de la Justice (138); Kraus v. Land Baden- Wurtemberg (139).

2. Bosman

In "Bosman", the ECJ decided on December 15, 1995:

1. Article 48 of the EEC Treaty precludes the application of rules laid down by sporting associations, under which a professional footballer who is a national of one member state may not, on the expiry of his contract with a club, be employed by a club of another member state unless the latter club has paid the former club a transfer, training or development fee.

2. Article 48 of the EEC precludes the application of rules laid down by sporting associations under which, in matches, in competitions which they organize, football clubs may field only a limited number of professional players who are nationals of other member states.

Thus, "Bosman" killed two European "sacred cows" (140): the transfer system and nationality clauses. Professional players were considered workers governed by EC Treaty, upholding their fundamental employment rights. In regard to transfer rules the ECJ concluded that the old transfer system and nationality clauses violated Article 39 (then 48); it refrained from taking a stand on the competition law aspects of the case.

Weatherill (1999) supports that the use of free movement law under Article 39 was a blip. He goes further saying that Competition Law is most applicable for sport. Thus, the ECJ elegantly passed the baton to the Commission. The ECJ reaffirmed "Walrave" and "Dona" in reference to sport application of EC Law insofar as it constituted an economic activity. As an extension, the Court did not preclude rules or practices justified for non-economic reasons (e.g. particular sport-specific regulations, in specific nature and context). These would have limited basis per proper objective, not excluding the whole of sporting activity from the scope of the Treaty.

Transfer rules were considered an obstruction of workers' free movement, as

"... such rules could only be justified if they pursued a legitimate aim compatible with the Treaty due to pressing reasons of public interest. Even so, application of such rules would still have to be such as to ensure achievement of the aim in question and not go beyond what is necessary for that purpose." Further, the ECJ concluded in "Bosman" (par. 106-110):

106. Due to social importance of sport... the aims of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty per results and encouraging the recruitment and training of young players must be accepted as legitimate.

107. The application of transfer rules... is not an adequate means of maintaining financial and competitive balance in the world of football ...

108. It must be accepted that the prospect of receiving transfer, development, or training fees is indeed likely to encourage clubs to seek new talent and train young players.

109. It is by nature difficult to predict the future of young players ... fees are contingent and uncertain, and are in any event unrelated to the actual cost borne by clubs of training both future pro players and those who will not play pro. The prospect of receiving such fees cannot, therefore, be either a decisive factor in encouraging recruitment and training of young players or an adequate means of financing such activities, particularly in the case of smaller clubs.

110. As the Advocate General pointed out in 226 et seq. of his Opinion, the same aims can be achieved at least as effectively by other means, which do not impede freedom of movement for workers.

For example, other means would be a salary cap via a collective wage agreement, redistribution of income from ticket sales, radio and TV contracts, and other sources to achieve a balance. The ECJ dismissed claims that transfer fees were necessary for the continuation of the world of football or that clubs should be compensated because of the expenses they had incurred recruiting their players.

On nationality clauses, the ECJ considered such practices discriminatory under Article 39 (48). The Court disregarded arguments that rules were not per se restrictions on employment, but restrictions on participation, as participation was the essential purpose of a professional player's activity. Advocate General Lenz's interpretations--as important for the world of sport in Europe as were the opinions by Justice Holmes in "Federal Baseball" for US baseball-supported that limitations of the sort would render freedom of movement inapplicable. The ECJ also did not accept that they were pro-competitive rules. Nothing prevented the richest clubs securing the best national players.

Advocate General Lenz and his interpretation of Article 81 and 82 (then 85 and 86) in the sports context was the best and most authoritative reading of the EC Treaty for ten years, until the ECJ decision in Meca-Medina. In Bosman, the ECJ did not deem appropriate to examine Competition Law application under Articles 81 and 82 once it found that rules were violations of Article 39 ... Lenz, however, did extend his analysis into the EU Competition Law application aspects in sport. (141) There should be, he argues, no exemptions on "sporting grounds". Nationality rules prevented free competition of clubs on recruiting players, thus constituting an agreement sharing sources of supply within the meaning of Article 81 (1) c. On transfers, the substitution of supply and demand by the traditional transfer system essentially was a deprivation of competitive opportunities. On the prospect of a labor exemption, UEFA argued that it was a concealed labor/wage dispute. Employer-employee relations should not come under scrutiny of Competition Law (in the spirit of US antitrust labor exemptions). However, in Lenz's opinion, there was no rule for employment relationships to fall outside the scope of Competition Law. He stated that restrictions of such sort might indeed exist under the scope of Article 81, but would be "limited in character". Lenz went beyond that theoretical problem observing that there were no collective bargaining agreements in place but simple horizontal agreements between clubs. Hence, UEFA's argument fell to the ground. Such agreements are within the scope of Article 81, though no abuse of a dominant position under Article 82 was established.

3. Post-Bosman

In the post-"Bosman" world of European sport, there was a consensus for new transfer rules. Sport migration patterns developed in Europe. Talented athletes would mainly swarm to the more lucrative sports markets. Participation by national athletes would deteriorate, and salaries would be controlled. Arguably the decision strengthened national leagues, and promoted competition in the lower level ones. The decision assumed a broader scope after the Copenhagen Summit in December 2002, when ten member-states were added to the EU. Furthermore, there were European trade agreements extending the coverage and application of Bosman (142).

Important and decisive cases in determining the world of European sport after Bosman include: Malaja v. FFBB (143); Deutscher Handballbund v. Maros Kolpak (144); Igor Simutenkov v. Abogado del Estado et al. (145).

In Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v. Federation Royale Des Societes De Basketball ASBL (146) ("Lehtonen"), a Finnish basketball player challenged acquisitions' deadlines as violations of fundamental rights according to Article 39 of the EC Treaty. The Court established that transfer windows were discriminatory, as for Belgian clubs they were April 15, 1995-May 15, 1995, for EU imports they extended to February 18, 1996, and for players from outside the EU zone (e.g. NBA players) they extended to March 31, 1996.

In Christelle Deliege v. Ligue francophone de judo et disciplines associees ASBL, et al. (147) ("Deliege"), the issue challenged was the freedom of sporting federations to select individual athletes to participate on national teams for international competitions. Belgian judoka Deliege had not been selected by her federation, as the International Judo Federation (IJF) imposed nationality-based quotas on participation. She was not a "professional" athlete, but lived off grants, was engaged full time in her sport, and had no other job. The Court stated that the EC Treaty applied to her as she was engaged in commercial activities. The ECJ recognized that some selection criteria were inevitable for ISFs; totally unrestricted open entry was deemed unworkable.

II. The scope of sport labor law

An important distinction that needs to be made after an investigation of the aforementioned cases refers to ECJ's interpretation on the scope of the principle of non-discrimination of the trade agreements between EU member states and non-members. This scope extends to workers that are already employed in a member state, not referring to access to employment. Hence, e.g. if Simutenkov (Russian national) was not already a professional soccer player employed by a professional club team in Spain, he would not have been successful in his case claiming he was discriminated by horizontal restrictive practices by the local league and federation.

The examination of Martins is very informative on the subject of classification of players. According to Martins, there is qualification to three groups:

--"Europe Agreement" (EA, gradual integration to the EU) involves 23 countries, provided the player was lawfully employed already. EC Treaty covers these players; however, there is no extension of EC Treaty coverage to access to employment

--Other association agreements with other countries not presupposing integration to the EU will not have direct effect. Such agreements entail 77 African, Caribbean, and Pacific (ACP) Countries with agreements (Cotonou pact) on the same working conditions as EU nationals including limitations of working conditions, such as federation rules limiting the numbers of non-EU players

--Other players, without protection under the EC Treaty, including US players, whose legal position is to be dependant upon national laws.

It is argued by Martins that national legislation could grant free access to employment from EA countries, until they fully join the EU. It is useful to quote Martins on the subject of European football (soccer) in the 21st Century, as he was instrumentally involved in the "social dialogue" between ISFs, FIFA, UEFA, and the EC. One observes the clear impact of the socio-cultural approach on his positions:

European football may expect to be flooded by cheap labor from all over the world, placed on the market by clever brokers. Clubs will see their investments into youth training dwindle and fade, players will face reduced salaries, unemployment among national footballers will rise, fans will no longer be able to identify with their team and eventually stadiums will empty. As a result of these cheap workers every aspect of the game, from youth training to national teams, will be affected.

III. The "Homegrown Rule"

In her recent critique of UEFA's "Homegrown Rule", which as of 2008-2009 requires at least four players on each team (in a 25-member roster) to be trained in the youth development program of the respective club, and up to four more trained in other clubs of the same UEFA member association as "locally trained" players, defined as players who have been registered for three seasons/years with the club(s) between the ages of 15 and 21, Briggs shares Professor Parrish's comments (148) that such a rule may find its way before the ECJ. The authors argue that such an admittedly shrewd legal strategy on the part of UEFA may still not pass ECJ and EC muster, as in effect it would create nationality-based discriminatory criteria for sport participation in both European and national leagues.

Although the rule does not explicitly impose nationality requirements on club teams, the effect of the requirement will be to decrease the number of foreign youths being trained by each club development program and thereby increase the number of local players on any given team ... UEFA can thus create de facto nationality quotas without ever using the word "nationality" (149).

According to Parrish (150), "even though UEFA claims the quota is neutral in terms of nationality, it is clear the intention and effect of the rule is to indirectly discriminate on the grounds of nationality." These authors agree that as long as there is no clear exception of sport in the EC Treaty in reference to employment, freedom of movement, and competition, such rules will not be valid under ECJ scrutiny. Briggs concludes:

With the Homegrown Rule, UEFA is making an effort to comply with the letter of EU antidiscrimination law while still preserving the important local character of European league soccer. It recognizes the validity of antidiscrimination policy and imposes only minimal restrictions on free movement, but reaffirms private league soccer as more than purely economic activity.

Her comment that "sport is not a business like any other business" (151) clearly embodies the aforementioned impact of a socio-cultural approach to sport policy. More analysis and discussion on the homegrown rule ensues in the recent developments' section. The author optimistically forecasts:

The Homegrown Rule is an attempt to evade current law, and if the rule is challenged, the challenge may provide a key opportunity for carving out a soccer exception to EU economic policy. Such an exception would be appropriate given the unique nature of the business of soccer. This is especially true where, as under the Homegrown Rule, the exception would have only minor affects on free movement of workers. A reexamination of application of antidiscrimination laws to soccer would be the EC's best option in resolving the current conflict (152).

IV. Efforts for conflict resolution

In a nutshell, one may conclude that there is a legal conflict between federation rules (transfer system and licensing systems) and EU labor and competition law. EU law principles are overarching. There are requirements which have to be fulfilled for the conclusion of an employment contract, such as the issue of a valid work permit-authorization by member state. On the matter, realities that have formed in policy entail a Northern "autonomy of sport" vs. a Southern "public intervention" (153). With the latter segmentation, Martins supports the notion that Southern European countries (i.e. Spain, Italy, Greece) attempt to intervene in the regulation of sport by means of Acts of Parliament affecting sport policy (e.g. capping work permit numbers). On the other hand Northern and Central European countries (i.e. The Netherlands and Germany in Martins' examination) attempt to allow for some sport federations' autonomy in drafting sport policy, although that becomes more difficult considering EC and ECJ scrutiny and contemporary EU Law application in sport. Martins argues that such "autonomy of sport" policies have to feature some member state regulations (and definitely "social dialogue" between sport federations, the EC, and various constituents) to control for the "Kolpak" phenomenon, extending the scope of "Bosman" to EA and trade associations countries' citizens.

In an effort to control a maelstrom of sport labor, Martins suggests several practices that would both make sense considering the "socio-cultural" aspect of EU sport, and would abide by EC policy and ECJ case law in terms of restrictions. Overall there is easier access to pro-sport employment. Federation rules may be passed into Acts of Parliament, a practice that would be too time-sensitive. EU minimum rules (statutory law), quotas for work licenses, and uniform EU laws are already passed by state legislatures. Transfer fees would be poured into the youth development fund. A "wild-card" system promoting participation at the top level would involve fees also invested into the youth fund. Works permits' ceilings may further provide the opportunity for smaller clubs to capitulate them, in certain cases selling them to bigger clubs that have reached their quota (154).

After "Bosman" and the cases mentioned above, in March 2001 an agreement was framed between EC and FIFA/UEFA, withdrawing complaints against a transfer system. Sadly, there was no FIFPro (FIFA players' union) participation in the negotiations (155). FIFA and the EC adopted a new, very elaborate and complex transfer system on July 5, 2001, in Buenos Aires, effective from September 1, 2001, most recently updated in 2005, with an anticipated new update following the settlement in Oulmers and the historic 2008 agreement between the G-14, UEFA, and FIFA. There were four categories of club segmentation, along with protection of youth training and clubs which invest in it. Lenz (above) disagreed with the legality of such regulations. Nonetheless, fees include a solidarity mechanism, as well as an alternative dispute resolution mechanism, usually referring matters to the CAS. On this matter, a recent case CAS 2005/A/899 FC Aris Thessaloniki v. FIFA & New Panionios N.F.C. ("Aris") exposed FIFA and UEFA's enforcement mechanisms. Aris Thessaloniki F.C. argued that a prior decision sanctioning Panionios N. F. C. by FIFA (due to participation of ineligible players) was not enforced by the member federation (the Greek soccer federation), thus costing the plaintiffs relegation. It is noteworthy to mention that FIFA acknowledged before the CAS its inability to unilaterally enforce its sanctions. It only recommends them to its member federations (156).

V. Recent developments

Between 2006 and 2008 there have been remarkable developments in ECJ case law, application of EU competition law in sport, jurisprudence and alternative dispute resolution in regard to sport labor, sport policy initiatives, and generally a flurry of legal activity in European sport, shaping a new reality. Herein, a few samples will merely be posed for further research.

In David Meca-Medina and Igor Majcen v. Commission (157), and Piau v. Commission (158), the ECJ proceeded to apply and interpret competition rules' application in sport. In the latter case, UEFA was found not to be in competition for player agency services. In what probably constitutes a controversial conclusion, the Court of First Instance (CFI) considered in its judgment that football clubs hold a collective dominant position on the relevant market (159). When examining the nature of the regulations on players' agents, the Fourth Chamber of the CFI first asserted that national football associations that are members of FIFA may be considered as undertakings as well as associations of undertakings within the meaning of Article 81 EC. As a consequence, FIFA is classified as an association of undertakings. Regarding the services provided by players' agents, the CFI considers in paragraph 73 that this activity is of an economic nature "involving the provision of services"--something that does not "fall within the scope of the specific nature of sport". As to the regulations adopted by FIFA, the CFI holds in paragraph 74 that they do not "fall within the scope of the freedom of internal organisation enjoyed by sports associations".

What the ECJ accomplished in Meca-Medina, was more than an original application of competition rules to sport, their interpretation, and the formation of a legal test as precedent for future cases in the sport sector. It further segmented theorists, scholars, policy-drafting entities, and politicians in two major constituencies; the ones that vehemently disagreed with the decision fearing a "case-by-case analysis" by the ECJ, dreading the legal uncertainty they claim to exist, not allowing sport governing bodies to operate in a prudent and secure environment for the better of sport; and the proponents of this decision as a fine display not of judicial activism, rather a much anticipated clarification, to achieve consistency in decision-making, alerting sport governing bodies that they are not above EU Law, and they need to ensure their policies will abide by the spirit and the letter of the EC Treaty. In a nutshell, in Meca-Medina swimmers challenged anti-doping and drug-testing regulations of their governing federation, arguing that they were incompatible with Arts. 81 and 82 EC Treaty. The ECJ took an important detour from established theory in "Walrave" and "Dona", in reference to rules of "purely sporting interest". The adoption of a new methodological approach (case-by-case analysis) can be summed as follows:

* Step 1: Is the Association an "undertaking or Association of undertakings"

* It is if it carries an economic activity itself

* It is an Association of undertakings if its members (clubs--athletes) exercise economic activity

* Step 2: Does the rule restrict competition (81[section]1) or abuse a dominant position (82)

* Overall context and objective pursued

* Restrictions inherent to objectives

* Proportionate in light of objectives

* Step 3: Does it affect MS trade

* Step 4: Does it fulfill conditions of 81[section]3 (sui generis Rule of Reason analysis)

Contrary to critics' contentions, this application of competition law in sport does allow for reasonable restrictions and regulatory evolution to abide by EU Law. As in Piau and Meca-Medina, restraints and regulatory criteria can be found within reason, not violating Arts. 81 and 82. Still, they should be tested. This is precisely where the "traditionalists", the ones who would love to see a sport exemption from EU competition law, revolt, arguing that sport governing bodies' rules, the "top-down" policy-making method in the classic pyramid model, should be protected, with the best interests of sport in mind. Whether the latter has been the case is definitely arguable.

SA Sporting du Pays de Charleroi, G-14 Groupment des clubs de football europeens v Federation internationale de football association (FIFA) (160), the Oulmers case for short, resulted from Charleroi losing the services of Moroccan national Oulmers, due to injuries he sustained during national team play. The G14, in support of Charleroi and championing European clubs' cause(s), claimed 860mil [euro]. in various damages from FIFA, a claim rejected by the Belgian Court, the Tribunal de commerce de Charleroi, which referred matters to the ECJ (161). The Q posed:

* Do obligations of clubs to release players without compensation and the

* Unilateral and binding determination of international matches calendar

* Constitute unlawful restrictions of competition (EC Treaty Art. 81)

* Abuses of a dominant position (EC Treaty Art. 82) or

* Obstacles to the exercise of fundamental freedoms (per EC Treaty Art. 39, 49, 81, and 82)?

In September 2006, FIFA's lead counsel, Heinz Tannler, observed that FIFA might consider establishing an insurance and compensation fund for international players. That was criticized due to time constraints and the unilateral level of action by FIFA, as opposed to including clubs in the decision-making process. The matches' calendar issue was not addressed. UEFA's strategy in the interim did involve FIFPro and the EPFL.

The sixteen months that followed were absolutely bursting with energetic academic discussions, legal and policy analyses, and the obvious stakeholders' negotiations, which led to the historic agreement that was struck on January 15th 2008, to the detriment of scholars eagerly anticipating ECJ Jurisprudence on the issue, and perhaps another Meca-Medina-type competition law application test. The settlement's main highlights:

* Oulmers settled (pending approval); G14 disbanded; European Club Association (ECA) formed after UEFA/FIFA signed Memorandum of Understanding with G14; ECA (already one of the crucial stakeholders in the first Social Dialogue venture in sport launched by the EC, as explained in the ensuing summary and policy sections) shall consist of 103 clubs representing 53 Member Associations, based on sporting achievement, i.e. UEFA's biennial ranking (http://www.uefa.com/newsfiles/648367.pdf )

* FIFA/UEFA will make available $252mil. (110 and 142 respectively) for clubs' (with national team players' representation) compensation and insurance

* Euro2008 sums split three ways (approximately $6,000/day) to: current club, previous season's club, club with player's license up to two years prior to international competition (could be the same club receiving the total sum)

* Assurances by FIFA/UEFA reducing numbers of preliminary games for national teams' competitions.

Webster (& Wigan) v Hearts (162), is the most recent (CAS award: 30.1.2008) precedent in regard to consequences of contract termination by a player without cause (post-protection period). This is an important interpretation of FIFA rules on status and transfers of players Art. 17.

FIFA Protected Period in a nutshell:

* First three contract years pre 28th birthday

* First two contract years post 28th birthday

* Unilateral termination by player without cause whilst in Protected Period results in sporting sanctions and financial compensation to club.

Webster breached without cause post-Protected Period. What is the compensation owed to the club? The FIFA Dispute Resolution Chamber (DRC) set damages at 625,000 [pounds sterling] (inexcusably according to CAS), whilst Hearts claimed 4.9 million [pounds sterling] (estimated market value at 4mil [pounds sterling]). According to the CAS award, the compensation owed to Hearts was set at the remaining value of the contract, 150,000 [pounds sterling] plus interest. Selected highlights from the award:

* Panel finds there is no economic, moral or legal justification for a club to be able to claim the market value of a player as lost profit

* Possible entitlement to the transfer or market value is entirely absent [in FIFA rules and player's contract] ... to imply it into the contract would contradict both the principle of fairness and the principle of certainty

* Compensation ... should not be punitive or lead to enrichment ... put clubs and players on equal footing

* ... no reason to believe that a player's value owes more to training by a club than to a player's own efforts, discipline and natural talent ... a talented and hardworking player tends to fare well, stand out and succeed independently from the exact type of training he receives, whereas an untalented and/or lazy player will be less successful no matter what the environment ... market value could stem in part from charisma and personal marketing

* ... it would be difficult to assume a club could be deemed the source of appreciation in market value of a player while never be deemed responsible for the depreciation in value ... if the approach relied on by Hearts were followed, players should be entitled to compensation for their decrease in market value caused by being kept on the bench for too long or having an incompetent trainer, etc ... such a system would be unworkable ...

* ... giving clubs a regulatory right to the market value of players and allowing lost profits to be claimed ... would in effect bring the system partially back to the pre-Bosman days when players' freedom of movement was unduly hindered by transfer fees ... becoming pawns in the hands of their clubs and a vector through which clubs could reap considerable benefits without sharing the profit or taking corresponding risks ... [It would] be anachronistic and legally unsound.

The first half of 2008 has most certainly provided Law and Policy scholars with ample opportunities for significant research and meaningful contributions. The historic football agreement and settlement in the Oulmers case, the CAS award in Webster, the various positions and arguments after ECJ's Meca-Medina test, and the EC White Paper (discussed below) approaches in political, legal, and administrative circles, have opened the path for the European Parliament's initiatives in regard to sport and its place in the new European reality, in view of the Reform Treaty.

In March 2008, under the auspices of the Slovenian Presidency, another intriguing venture featured the 27 Member States' Ministers responsible for sport, the Presidents of the National Olympic Committees, members of the Executive Committee of the European Olympic Committees, and the European Commissioner for Sport, Jan Figel, reaching a declaration essentially summarising recent European positions on the social significance of sport, emphasising the need for an urgent, structured, large-scale stakeholder dialogue. In April 2008, the first official position on sport post-EC White Paper was adopted (31-1-1) by the Committee on Culture and Education of the European Parliament and moved for a plenary session vote in May 2008. The latter, on May 8th 2008, adopted the report by a wide margin (518-49-9).

The rapporteur, Greek MEP Manolis Mavrommatis, commented that the inclusion of sport in the Reform Treaty is a big step toward a European Policy on sport, and underscored the White Paper's various targets. One can characterise the report as descriptive, prescriptive, and restrictive. It initially describes and revisits many of the topics posed and analysed in the White Paper. It proceeds with offering a set of recommendations, guidelines, directives, suggestions for action items, some more elaborate than others, and simultaneously deviates from some main areas of the White Paper and findings of the Commission and the European Court of Justice, at times assuming a much friendlier approach to the traditional sport governing bodies, which were the first to express disappointment at the controlled and balanced approach found in the White Paper. Selected highlights from the report, short commentary, and useful links follow. The report:

* Declares that the White Paper failed to take a clear position on how to uphold the principle of the specificity of sport and assumes a pro-traditional sport governing bodies approach, i.e. purports that a case-by-case analysis as posed in Meca-Medina by the ECJ would be unsatisfactory and characterised by legal uncertainty [for the record, the author sides with the Wathelet position (http://www.sportslaw.nl/documents/cms_sports_id100_1_Doc% 20Wathelet%20EN%20versie%20II.doc) and other colleagues who question such concerns]

* Promotes action re: sports-specificity, European sport policy, and clarification of EU Law application to sport in light of Article 149 of the Lisbon Reform Treaty [stopping short of advocating an outright exemption for sport as an economic activity from EU competition law (Draft Report on the White Paper on Sport, Motion, p. 70, Amendment 227, para. 14a)]

* Reiterates the findings of the Austrian Presidency re: financial impact of sport on European economy (407 billion [euro] in 2004, 3.7 % of EU GDP, employing approximately 15 million or 5.4% of the labor force)

* Emphasises the need for Commission action in regard to digital piracy (in particular live and re-transmission of sport events) threatening the sport sector significantly

* Finds that in addition to the application of competition law insofar sport is considered an economic activity, there are other European Law areas that need to be respected by the sport sector, namely prohibiting discrimination in employment based on gender, race, national origin, religion, disability, age, or sexual orientation (Art. 13 EC Treaty)

* Promotes participatory democracy in decision-making in re: sport governance mechanisms, at the same time declaring that sport cannot be compared with ordinary economic activity, especially due to (a) the specific nature of sporting rules and activities and (b) the specific framework of sport (the pyramid, i.e. one federation per sport model, the independence of sport organisations, etc.)

* Through means that are elaborately expanded in the report, the Commission and member states are called to assume a unified, organised, multi-faceted plan to combat doping

* Calls on the Commission to recognise the legality of "home-grown" rules assisting in the national and local development of young players; further declares UEFA's "home-grown" rule scheme a model that could be emulated by other federations [here it is important to note that the Commission, via its Employment Commissioner Vladimir Spidla on May 28, 2008, chastised a directly discriminatory policy on the grounds of nationality proposed by FIFA to its member federations, the "6+5" rule, according to which at least six players on the field at the beginning of each match would have to come from the country of the club they are playing for. On the other hand, the present studies the Commission has conducted in regard to the "home-grown" rule concluded that the UEFA rule does not lead to direct discrimination on the basis of nationality, but that a risk of indirect discrimination on the basis of nationality exists as access to clubs' training centers is easier for the young national players rather than players from the other member states. According to the above release, Spidla, MEP Belet (EPP-ED), and Commissioner Figel all agreed that, although not perfect, the "home-grown" rule appears reasonable and modest, encouraging the investment of clubs in (local) youth development, thus deserving the support of the Commission, Parliament, and broader European political constituencies. Nonetheless, the Commission reportedly will "closely monitor" the implementation of the UEFA rule and undertake "a further analysis of its consequences by 2012" in order to assess its implications in terms of the principle of free movement of workers]

* Proposes a special budget line in 2009 for sport pilot programmes

* Includes a form of a "soft exemption" for sport under which the Commission and member states are called to recognise sport officially as a complementary competence in the new Reform Treaty, giving practical effect to the principle of the specificity of sport in EU-Law making, respecting its autonomy, establishing a consistent future European Policy in the sector, enabling the Commission to promote and complement--but not regulate--the actions of member states and sport organisations (163)

* Strongly supports existing gambling monopolies, which are considered based on "imperative requirements in the general interest", including control of a "fundamentally undesirable activity", prevention of compulsive gambling and maintenance of public order, pursuing such objectives in compliance with European Law as established in the case law of the European Court of Justice

* Voices its concern at the possible deregulation of the market in gambling and lotteries, since state-run or state-licensed gambling or lottery services will be harmed by competition and will restrict their support and social mission mainly to amateur sport [note that such argumentation was not convincing for the ECJ in Gambelli and Placanica, cases elaborated elsewhere (164)]

* Sides with the Commission in a need to provide tax exemptions in view of the social role sport performs, and its close links to local communities benefitting from sport

* Supports the creation of an independent financial monitoring entity overseeing the finances of professionals sport clubs, a European clubs' standardised management control strategy, as well as a European independent certification body clearing transfers and the pertinent financial transactions, ensuring fairness in competition and the proliferation of the European sport model

* Challenges sport governing bodies and federations to reform their decision-making mechanisms in order to become more transparent and democratic, calling the Commission to ensure this will take place appropriately

* Calls the Commission to assist sport governing bodies in regulating sport agents by means of a directive; also recommends the creation of a European certification system, and strongly encourages an expedited investigation into the need for European legislation on agents' licensing

* Calls the Commission to expeditiously tackle the problem of human trafficking and young athletes' migration by: subscribing to a European charter for sports solidarity, creating a solidarity fund for education and prevention in the countries most affected by sport human trafficking, and reviewing FIFA Art. 19 on Status and Transfers of Players, protecting minors

* Recommends as a condition for licensure, the mandatory health insurance of players

* Notes that media rights are owned by sports organisations and due to the many differences (including market conditions), the principle of subsidiarity is to be respected, ensuring nonetheless that redistribution of fees from collective pooling broadcasting rights will be equitable for the weaker clubs; further, a block exemption from competition rules is proposed, if so required on a European level, for the legal certainty of such collective selling practices of media rights

* Due to the time required for ratification of the Reform Treaty and the eventual budgetary decisions for sport allocations, the Commission is requested to adopt an implementation plan for the White Paper action items

* Invites the comprehensive participation of many entities outlined in the report.

In sum, there are important issues raised in the report. Considering the plenary session reception of its somewhat controversial action items and depending on the European Council's acceptance that is expected to follow suit, as well as the Commission's approach of the Parliament's and Council's recommendations, one may wish to brace oneself for a dynamic environment for sport policy development in the process of the much anticipated ratification of the Reform Treaty and its direct ramifications for the sport sector. Undoubtedly, the report and its adoption present fertile ground for future Law and Policy research in this dynamic era.

G. EU Competition and Labor Law applications in sport summary

In sum, EU competition and labor law applications in sport offer the following conclusions:

* EC Treaty Articles 3, 81, and 82 are applied in sport settings, insofar as sport is treated as a commercial activity in the particular case.

Otherwise, there are no sport-specific exemptions from EU Competition laws (as opposed to several sport-related practices in the US being exempt from antitrust scrutiny, e.g. pooling of broadcasting rights under the SBA of 1961, the CBA labor exemptions under the NLRA, etc).

* Buttress for the "social, educational, and cultural character and contribution of sport", EC Treaty Arts. 86, 87 et seq. allow for states assuming the burden of clubs in financial hardship (no such direct policy sample may be encountered in the US, but for stadia and arenas built via municipality and state funds, receiving special tax treatment, etc).

* Horizontal restraints in sport are attempted to be controlled, promoting the socio-cultural model, by means of EC policy, ECJ, or national courts or commissions' decisions, i.e. against exclusive licensing -unless it protects the weaker financially clubs- separating the regulatory from the commercial activity of sports organizations, yet allowing for considerable regulatory autonomy, provided sport purposes are served in an objective, transparent, and non-discriminatory manner, according to Commissioner Monti.

* "Bosman" and the cases that followed brought forth a free sport market and free movement for sport labor, forestalling transfer and nationality rules in the EU, including laborers originating from trade associations' countries.

* Considering there are no collective bargaining exemptions in EU sport, SINGOs cannot argue that sport labor should be treated differently.

* Access to sport employment and international competition participation opportunities may be controlled by reasonable rules according to Lenz, Monti, and "Deliege" (2000).

* The inherent conflict between EU law and SINGOs is usually resolved by dialogue between the EC and the SINGO, as in the case of the new FIFA transfer system, the Oulmers settlement, and the most recent development featuring the EC-sponsored social dialogue in sport (see ensuing section on contemporary European sport policy). Otherwise, as long as SINGOs rules meet the criteria set by the EC, complying by EU law, the EC will not intervene.

H. Contemporary European sport policy

Recent developments have featured post-Bosman efforts to introduce a "Sports Exemption" or "Special Sports Article" in the EC Treaty, in order to:

1. Keep sports organizations' autonomy intact

2. Ensure EU institutions would consult with the sports sector when sporting issues were discussed, and

3. Incorporate sport into the framing of other EU policies.

Such initiatives aim at protecting sport from EU law's "insensitive application" (165), at the same time protecting traditional and autonomous structures. Such an effort is geared toward not merely protecting social, cultural, and educational values of sport, but also commercial interests of the sporting community in Europe from Brussels intervention. After "Bosman", European Non-Government Sport Organizations (ENGSOs) (36 state federations), the European Olympic Committee (EOC), and UEFA submitted a joint proposal featuring certain important elements: 1) sport would be treated by EU as subsidiary, 2) EU would respect autonomy, democratic structures, and national distinctive features of sport, 3) problems and viewpoints of sport would be taken into careful consideration in connection with future legislation, and 4) NSFs and ISFs would be given a voice when new EU proposals affecting sport are promoted. This policy initiative was unrealized in the Amsterdam Treaty of 1996, as environmental matters and the expansion were higher on the agenda, as well as due to a fear from the Commission that it would set a dangerous precedent for other industries. A compromise was reached by the "Nonbinding Declaration of Sport in the Amsterdam Treaty":

The Conference emphasizes the social significance of sport, in particular its role in forging identity and bringing people together. The Conference therefore calls on the bodies of the European Union to listen to sports associations when important questions affecting sport are at issue. In this connection, special consideration should be given to the particular characteristics of amateur sport.

By 1998 the Commission had received 55 complaints relating to sport. (166) The Council of Ministers promoted the socio-cultural qualities of sport through political priorities. Suddenly sports were a high-profile matter in EU policy. (167) The ensuing policy progress involves:

--"The Pack Report"

--"Report on the role of the European Union in the field of sport", Document A4-01 97/97 (May 28, 1997)

--"Television-without-frontiers directive"

Directive 97/36/EEC of the European Parliament and of the Council of June 30, 1997 amending Council Directive 89/552/EEC; Article 3A--Popular sporting events are to be made available to the public on free TV

--Commission of the European Communities: "Development and Prospect for Community action in the field of Sport", Directorate General X (Brussels) 1998.

--Commission of the European Communities: "The European Model of Sport" (1998), Consultation document, Directorate General X, (Brussels), which attached questionnaires per European sport philosophy and structure. Findings were presented in Olympia, May 1999, in the First European Conference on Sport

--The Vienna European Council Presidency Conclusions, the Paderborn Conclusions, and the Sports Conference in Olympia, which led to the publication of the "Helsinki Report on Sport", presented in Helsinki, December 1999. According to the "Helsinki Report", there was a new approach to EU sports policy, strongly advocating the conservation and reinforcement of social and educational functions of sport and the preservation of the existing sports structure in Europe

--Lisbon, May 10, 2000, Declaration of Social Dimension of Sport, featuring recommendations for establishment of an informal working group with the aim of proposing forms of participation with the World Anti-Doping Agency (WADA)

--Nice European Council meeting, December 7-9, 2000. The Nice Conclusions, on specific characteristics of sport and its social function in Europe, of which account should be taken in implementing common policies:

Even though the Community does not have direct power, it must take into account the social, educational, and cultural functions inherent in sport that make it special, in order that the code of ethics and the solidarity essential to the preservation of its social value may be expected and nurtured.

The EC stresses its support for the independence of sports organizations and their right to organize through appropriate associative structures. It recognizes that, with due regard for national and community legislation and on the basis of a democratic and transparent method of operation, it is the task of sporting organizations to organize and promote their particular sport, particularly as regards the special sporting rules applicable and the makeup of national teams, in the way which they think best reflects their objectives.

It notes that sports federations have a central role in ensuring the essential solidarity between the various levels of sporting practice from recreational to top-level sport, which co-exist; they provide the possibility of access to sports for the public at large, human and financial support for amateur sports, promotion of equal access to every level of sporting activity for men and women alike, youth training, health protection, and measures to combat doping, acts of violence, and racist or xenophobic occurrences. These social functions entail special responsibilities for federations and provide the basis for the recognition of their competence in organising competitions. While taking account of developments in the world of sport, federations must continue to be the key feature of a form of organization providing a guarantee of sporting cohesion and participatory democracy.

In the process of the proposed EU Constitution, there were amendments as constitutional proposals referring to sport: The Union shall contribute to the promotion of European sporting issues, given the social and educational function of sport (Article 16).

Union action shall be aimed at developing the European dimension in sport, by promoting fairness in competitions and cooperation between sporting bodies and by protecting the physical and moral integrity of sportsmen and sportswomen, especially young sportsmen and sportswomen (Article 182).

The ECJ is likely to be the one entity to decide the scope of nonintervention policy toward professional sports sectors in absence of "hard" EC sports law. (168) On October 29, 2004, the Treaty of Rome promoted the EU Constitution, with state legislatures and referendums to follow. Articles I-17 and III-282 were proposed coordinating, supplementing, and supporting action. Sport fell under the category of education, training, and youth. Emphasis was drawn on its social and educational function. Once more, it is recognized that "European construction based only on economic aspects is condemned to failure". (169)

Finally, the highly anticipated first official position on sport by the EC was published in the summer of 2007, and the "White Paper" was received with controlled optimism by many, and with substantial disappointment by the traditional governing entities of sport, expecting more favorable action and possibly legislative exemptions to re-affirm their regulatory autonomy. The "White Paper" featured three main sections, the societal, the economic, and the organization of sport (selected highlights below):

* The societal role of sport, considering which the EC shall:

* Develop and support guidelines and research for PE

* Collaborate with Law enforcement to fight doping

* Support network of Member States' (MS) agencies

* Fund education-based sport programs

* Nurture young sport talent training

NOTE: "Locally trained players' rules" could be deemed compatible with EC Treaty Law if they do not lead to direct nationality discrimination AND

* ... if possible indirect discrimination effects resulting from them can be justified as being proportionate to a legitimate objective pursued, such as to enhance and protect the training and development of talented young players

* Organize fight against violence and racism via new instruments

* Promote girls' and women's access to sport (including administrative and management posts)

* Create policy attending to international transfers, doping, exploitation of underage players, money-laundering, and security during major events

* The economic dimension of sport, according to which the EC undertakes to:

* Fund research and develop financial impact instruments (utilized by MS--EU)

* Fund non-economic quantitative and qualitative research (Eurobarometer polls, participations rates, volunteerism data, etc.)

* Fund study to assess sport's direct (GDP, growth and employment) and indirect (education, regional development, EU attractiveness) impact

* Organize exchanges between ISFs and MS in reference to major events best practices promoting sustainable economic growth, competitiveness, and employment

* Fund independent study on grassroots and sport for all financing

* Defend reduced tax rates for sport

* The organization of sport, which challenges the EC to:

* Investigate and pursue the crucial balance between self regulation and respect for EU Law, without exemptions, considering

* Specificity of sport prisms

* Sport-specific rules, limits on numbers, competitive equity and uncertainty of results

* The pyramid, autonomy, structure of sport organizations and grassroots solidarity mechanisms, keep one governing body per sport

* Combat nationality-based discrimination

* Fund non-EU nationals individual competitions study

* Explore the problematic area of player transfers further (though no clear plan or action items are posed in the respective section)

* FIFA Rules are appreciated as prudent practice

* Guarantee access to national courts, protect minors' education, etc.

* Seeds for a verification system by ISF or MS

* Fund impact assessment in respect to players' agents to determine EU action

* Research the "Player trafficking" problem; EC study on child labor and Communication between MS

* Support public-private anti-corruption partnerships

* Investigate licensing best practices models

* Monitor and affirm collective and individual clubs selling media rights

* Engage in social dialogue promotion and continuously follow-up.

Precisely on these social dialogue efforts, on July 1, 2008, in Paris, France, the EC commenced what may prove to be an instrumental venture in the sport sector. Although not directly embracing efforts toward per se CBAs in the European sport sector, the seeds for a more democratic and representative nature of decision-making are certainly there. Especially since "footballers are some of the most mobile professionals in Europe", according to Commissioner Spidla, who alongside Commissioner Figel launched the effort as a necessary sequence to EC's White Paper, it comes as fairly rational to engage in a social dialogue with all pertinent constituents. These are currently the ECA as mentioned above, along with the Association of European Professional Football Leagues (EPFL), representing clubs/employers, FIFPro, representing players/employees, and still preserving the traditional governance model and encouraged by pro-specificity of sport socio-cultural caucuses in the EC, UEFA, chairing the social dialogue efforts.

I. Conclusion

Summarizing the main points of this research, the reader may wish to keep the fact that the two often conflicting worlds of sport governance have more in common than one may initially presuppose. Recent efforts e.g. by policy makers in Europe and the US Congress to battle the phenomenon of extensive drug use in sport attest to the fact. Moreover, EU sport features more commercialized influences than what a pure "socio-cultural" model may initially accept. As Allison, Foster, and Halgreen agree, EU sport has a lot of commercial force of its own, so European observers have to be careful when chastising US commercial sport influences.

Having acknowledged that fact, the aforementioned analysis still leads to several conclusions that distinguish between US and EU law and policy applications in sport:

* The US sport model (amateur and professional) allows for more specific exemptions from competition laws for sport. This finding appears ironic when one considers that the EU socio-cultural model attempts to promote exclusionary tactics (separate territories theory, segment commercial and regulatory functions of ENGSOs, distinguishing between the commercial activity and sport per se) and incorporate the social, educational, and cultural character and contribution of sport in EU policy. EC Treaty Articles 81 and 82 have no explicit exemptions from competition law scrutiny for sport entities.

* On the other hand, Arts 86, 87 et seq. allow for state intervention and European governments' practices follow a method that may salvage sport clubs threatened with economic extinction. These practices have been briefly analyzed (170) and more elaborately criticized (Dedes, 2005) by European legal scholars. Such "special liquidation" salvation practices arguably would not have a place in US sport policy.

Both the US Congress and the European Commission will not hesitate to intervene in sport matters. Idealists and devotees of the "socio-cultural" model in sport would reconsider past positions (171), and accept that political intervention is crucial for the perseverance of important principles in sport. Political support has a place in sport; the latter needs politics when dealing with contemporary problems. Adhering to the preservation of the multi-faceted service sport can offer to society, constituents from both the US and the EU can play a major role in shaping 21st Century sport policy. Considering the problems, inconsistencies, and conflicts examined above, the challenge remains. Whether a balance between commercial activity and the "traditional" aspect of sport can be reached is for future legal and policy historians to note. For what it is worth, this research argues that, contrary to popular belief, the two worlds of sport governance are closer than what a "quick look" analysis may conclude. Policymakers and judicial decision-makers are arguably closer than they have ever been, due to the commercialized character sport ventures assume. The investigation above demonstrates the problems both sectors of the world "sport order" face, and challenges key stakeholders to cooperate and bring the worlds of sport closer together, for the benefit of the fan, the owner in the long-term, and sport.

(1) Foster, K. , Alternative models for the regulation of global sport. In L. Allison, (Ed.), The global politics of sport (pp. 63-86). London, England: Routledge. (Foster 2005).

(2) Halgreen, L., European Sports Law--A Comparative Analysis of the European and American Models of Sport. Copenhagen, Denmark: Forlaget Thomson. (Halgreen 2004)

(3) Kaburakis, A., International Comparative Sport Law--"War of the worlds" or the path to a more balanced future? US and EU competition and labor law examination in relation to sport policy. Managing Policy and Politics in Sport [Special Issue]. International Journal of Sport Management and Marketing (manuscript submitted for publication). (Kaburakis, A. 2005a).

(4) L. Allison (Ed.), The global politics of sport (pp. 5-25). London, England: Routledge. (Allison, 2005); Foster, 2005; Halgreen, 2004.

(5) Allison, 2005, p. 117.

(6) Foster 2005, pp 73-77.

(7) Examples in: R v. Disciplinary Committee of the Jockey Club ex p Aga Khan (1993) 2 All E R 853, Martin v. IOC, 740 F.2d 670 (9th Cir. 1984), Defrantz v. USOC, 492 F. Supp 1181 (1980), and San Francisco Arts & Athletics Inc. v USOC, 483 U.S. 522 (1987).

(8) Halgreen, 2004, p. 64.

(9) 15 U.S.C. [section][section] 1-7.

(10) Weiler and Roberts 2004.

(11) Wong 2002.

(12) Kaburakis, 2005b.

(13) Sherman 2005.

(14) Sherman 2005.

(15) 468 U.S. 85.

(16) 134 F.3d 1010.

(17) I.e. Justice v. NCAA, 577 F. Supp. 356 (D. Ariz. 1983), AIAW v. NCAA, 236 U.S. App. D.C. 311 (D.C. Cir. 1984), Smith v. NCAA, F.3d 180 (3rd Cir. 1998), Adidas America, Inc. v. NCAA, 40 F. Supp. 2d 1275 (D. Kan. 1999), Pocono Invit. Sports Camp, Inc. v. NCAA, 317 F. Supp. 2d 569 (E.D.Pa. 2000), Worldwide Basketball & Sports Tours v. NCAA, 388 F. 3d 955 (S.D. Oh. Columbus Division 2000).

(18) 339 F. Supp. 2d 545 (S.D.N.Y. 2004).

(19) CV 06-0999 VBF (C. D. Cal. Western Division, settlement filed January 29, 2008).

(20) United States v. NFL, 116 F. Supp. 319 (E.D. Pa. 1953), 196 F. Supp. 445 (E.D. Pa. 1961).

(21) 15 U.S.C. Section 1291.

(22) 212 F. Supp. 319 (S.D.N.Y. 1962)

(23) Blaich v. NFL, 322.

(24) Halgreen, 2004, p. 108.

(25) 621 F. Supp. 880 (E.D. Mo. 1985).

(26) Halgreen, 2004, p. 109, footnote 64.

(27) 842 F. 2d. 1335 (2nd Cir. 1988).

(28) 754 F. Supp. 1336 (N.D. Ill. 1991), 961 F. 2d. 667 (7th Cir. 1992), 113 S. Ct. 409, 121 L.Ed. 2d 234 (1992).

(29) 567 F. 2d 9 (D.C. Cir. 1977), 434 US 829 (1977).

(30) 391 US 367 (1968).

(31) Cox quoted in Halgreen, 2004, p. 127, footnote 104.

(32) Halgreen, 2004, p. 128.

(33) 670 F 2d 1249 (2nd Cir. 1982).

(34) Bell, T. Lawmakers hear testimony on Atlantic City sports betting bill. (Bell, 2004).

(35) EurActiv.com (2006, April 5). Commission investigates national restrictions on sports betting. (EurActiv, 2006).

(36) 34 F 3d 1091 (1st Cir. 1994).

(37) 385 F Supp 149 (S.D.N.Y. 1974).

(38) Levin v. NBA, 152.

(39) 97 F.Supp. 2d 130 (2000), 284 F.3d 47 (1st Cir. 2002.

(40) Fraser v. MLS, 31.

(41) 379 F. Supp. 966 (C.D. Cal. 1974).

(42) S.F. Seals v. NHL, 969-970.

(43) 467 US 1225 (1984)

(44) 469 US 990 (1984).

(45) 815 F. 2d 562 (9th Cir. 1987), 484 US 960 (1987).

(46) 831 F. Supp. 421 (E.D. Pa. 1993).

(47) 402 F. Supp. (D. Minn. 1975).

(48) Bowman v. NFL, 756.

(49) 323 F 2d 124 (4th Cir. 1963).

(50) AFL v. NFL, 130-131.

(51) Halgreen, 2004, p. 154, footnote 167.

(52) 351 F. Supp. 462 (E.D.P.A. 1972).

(53) 389 F. Supp. 867 (S.D.N.Y. 1975).

(54) 259 US 200 (1922).

(55) 346 US 356 (1953).

(56) 407 US 258 (1972)

(57) 352 US 445 (1957).

(58) 358 US 242 (1959).

(59) Weistart & Lowell quoted in Halgreen, 2004, p. 169.

(60) Halgreen, 2004, p. 171.

(61) Halgreen, 2004, p. 171, footnote 7.

(62) 407 F. Supp. (D. Minn 1975).

(63) Halgreen, 2004, p.172.

(64) Halgreen, 2004, p. 173.

(65) Halgreen, 2004, p. 175.

(66) No. 70 Civ. 1526 (S.D.N.Y. 1982).

(67) 41 F 3d 402 (8th Cir. 1994).

(68) Halgreen, 2004, p. 178.

(69) Halgreen, 2004, p. 178.

(70) 79 F.Supp. 260 (S.D.N.Y. 1948).

(71) Halgreen, 2004, p.179, footnote 26.

(72) 346 US 356 (1953).

(73) Flood v. Kuhn, 312 F. Supp. 404 (S.D.N.Y. 1970), 407 US 258 (1972).

(74) Flood v. Kuhn, 284.

(75) 15 USC Sec. 27 (a).

(76) Halgreen, 2004, p.180.

(77) 331 F 3d 1177 (11th Cir. 2003).

(78) MLB v. Crist, 1188.

(79) Kansas City Royals v. MLBPA, 532 F. 2d 615 (8th Cir. 1976).

(80) 348 US 222 (1955).

(81) 348 US 236 (1955).

(82) Radovich v. NFL, 358 US 445 (1957).

(83) 401 US 1204 (1971).

(84) 389 F. Supp. 867 (S.D.N.Y. 1975).

(85) 351 F. Supp. 462 (E.D.P.A. 1972).

(86) 354 F. Supp. 1241 (S.D. N.Y. 1973).

(87) 410 F. Supp. 843 (W.D.P.A. 1976).

(88) 665 F. 2d 222 (8th Cir. 1981).

(89) 358 F. 2d 165 (9th Cir. 1966).

(90) 359 F. Supp. 260 (N.D.G.A. 1973).

(91) 465 F. Supp. 665 (S.F.N.Y. 1979).

(92) 15 U.S.C. [section] [section] 12-27 & 29 USC [section] 52.

(93) 15 USC Sec. 17.

(94) 29 USC Sec. 101-115.

(95) 29 USC Sec. 141-187.

(96) Local Union # 189, Amalgamated Meatcutters & Butchers Workmen of North America, AFL-CIO v. Jewel Tea Company, 381 US 676 (1965); United Mineworkers of America v. Pennington, 381 US 657 (1965).

(97) Gary Roberts in Halgreen, 2004, p. 184, footnote 49.

(98) 543 F. 2d 606 (8th Cir. 1976).

(99) Philadelphia World Hockey Club v. Philadelphia Hockey Club, 351 F. Supp. 462 (E.D.P.A. 1972); Kapp v. NFL, 390 F. Supp. 73 (1974), 583 F. 2d 644 (9th Cir. 1978); Robertson v NBA, 389 F. Supp. 867 (S.D.N.Y. 1975).

(100) 593 F. 2d 1173 (D.C. Cir. 1978).

(101) McCourt v. California Sports, 600 F. 2d 1193 (6th Cir. 1979); Zimmermann v. NFL, 632 F. Supp. 398 (D.D.C. 1986).

(102) Clarett v. NFL, 369 F.3d 124; 2004 U.S. App. LEXIS 10171, 2nd Cir. 2004.

(103) Bridgeman v. NBA, 675 F. Supp. 960 (D.N.J. 1987).

(104) Halgreen, 2004, p. 187.

(105) Powell v. NFL, 678 F. Supp. 777 (D. Minn. 1988), 930 F. 2d 1293 (8th Cir. 1989).

(106) Halgreen, 2004, p. 187.

(107) 764 F. Supp. 1351 (D. Minn. 1991).

(108) 857 F. Supp. 1069 (S.D.N.Y. 1994), 45 F. 3d 684 (2nd. Cir. 1995), 116 S. Ct. 2546 (1996).

(109) 116 S. Ct. 2116 (1996).

(110) The Treaty establishing the European Community (as amended by the Treaty of Amsterdam), C 325/35, 12-24-02.

(111) Halgreen, 2004, p. 100, footnote 38.

(112) C-85/76 [1979] ECR 461.

(113) C-27/76 [1978] ECR 207, [1978] 1 CMLR 429.

(114) Halgreen, 2004, p. 101.

(115) Dedes, 2005.

(116) Halgreen, 2004, p. 103, footnote 47.

(117) Dedes, 2005.

(118) Dedes, 2005

(119) Halgreen, 2004, p. 113.

(120) Halgreen, 2004, p. 114.

(121) EurActiv, 2005a.

(122) Halgreen, 2004, p. 122.

(123) Halgreen, 2004, p. 123.

(124) Halgreen, 2004, p. 125.

(125) COMP/35.163: COMP/36.638; COMP/36.776. GTR/FIA et al. Official Journal June 13, 2001.

(126) Foster, 2005; Halgreen, 2004.

(127) Monti, 2001.

(128) Monti, 2001.

(129) C-415/93 [1996] ECR 5040.

(130) [1974] ECR 1405.

(131) EC Treaty Article 3 (c)

(132) Halgreen, 2004, p. 191.

(133) C-13/76 [1976] ECR 1333.

(134) Halgreen, 2004, p. 51.

(135) C-222/86 [1987] ECR 4112.

(136) C-71/76 [1977] ECR 765.

(137) C-107/83 [1984] ECR 2971.

(138) C-106/91 [1992] ECR 1-3351.

(139) C-19/92 [1993] ECR 1-1663.

(140) Halgreen, 2004, p. 167.

(141) Halgreen, 2004, p.194.

(142) Halgreen, 2004; Martins, R. B. (2004).

The Kolpak Case: Bosman Times 10? International Sport Law Journal, 1-2, 26-33.(Martins, 2004).

(143) CE 30-12-2002, 219646.

(144) C-438/00, ECJ 8-5-2003.

(145) C-265/03, ECJ 12-4-2005.

(146) C-176/96 [2000] ECR 2681.

(147) C-51/96 and C-191/97 [2000] ECR 2549.

(148) EurActiv.com (2006, April 5). Commission investigates national restrictions on sports.

(149) Briggs, L. (2005). UEFA v The European Community: Attempts of the Governing Body of European soccer to circumvent EU freedom of movement and antidiscrimination labour law. Chicago Journal of International Law, 6, 439

(150) Quoted in EurActiv, 2005b.

(151) Briggs, 2005.

(152) Briggs, 2005.

(153) Martins, 2004, p. 28.

(154) Martins, 2004.

(155) Martins, 2004.

(156) "Aris", par. 45.

(157) Case C-519/04.

(158) Case C-171/05.

(159) Piau, 107-121.

(160) Case C-243/06.

(161) OJ C 212 of 02.09.2006, p.11.

(162) CAS 2007/A/1298-1299-1300.

(163) (Draft Report on the White Paper on Sport, Motion, pp. 54-55, Amendment 179, para. 10.

(164) Kaburakis, 2008.

(165) Halgreen, 2004, p. 57.

(166) Halgreen, 2004, p. 58.

(167) Halgreen, 2004, p. 58.

(168) Mestrte, 2005; Halgreen, 2004.

(169) Robert Schuman quoted in Mestrte, 2005.

(170) Halgreen, 2004, p. 103.

(171) Vassilakopoulos, G. (2005). Transcript from FIBA Europe General Assembly in Portorose, Slovenia, May 20-22, 2005.

by Anastasios Kaburakis, Assistant Professor of Sport Law and Sport Management and Director of the Sport Management Graduate Program, Department of Kinesiology and Health Education, Southern Illinois University, Edwardsville, United States of America.

Comparison of US and EU Sport Policy

                  US                         EU

Competition       Sherman Anti-Trust Act     EC Treaty (Amended by
Laws              (1890)--prohibits          Treaty of Amsterdam
                  agreements restraining     2002), Article 81 (1)-
                  trade and attempts to      prohibits practices
                  monopolizeClayton Act      that restrict/distort
                  (1914)- supplements        competition within
                  SAA, trebles damages,      common market, Article
                  prohibits exclusive        82- prohibits abuse of
                  sales, contracts, and      a dominant position
                  unfair price cutting,      within common market
                  also states "labor of
                  human beings is not a
                  commodity or article of
                  commerce"

Exemptions to     Federal Baseball (1922)    Only exempt if there is
Competition       US Supreme Court           no economic activity,
Laws              decision Sports            for "sporting interest"
                  Broadcasting Act           rules only
                  (1961)AFL and NFL
                  merger (1970) Robertson    Article 81 (3): Article
                  v. NBA (1975)--ABA and     81 (1) inapplicable if
                  NBA merge                  the practice
                                             contributes to
                  Curt Flood Act (1998)      economic/technological
                  repealing Federal          progress while the
                  Baseball re: MLB labor     consumer benefits, and
                  only; MLB v. Crist         without elimination of
                  (2003) abides by stare     competition (Sui
                  decisis and declares       generis Rule of Reason
                  league contraction is      analysis)
                  still exempt
                                             See application of
                                             Arts. 81 & 82 in
                                             Meca-Medina (2006)

                                             Arts. 86, 87 et seq.
                                             state funds for teams
                                             in need--Special
                                             liquidation practices

Labor Laws        National Labor             EC Treaty Articles 39 &
                  Relations Act, Sec. 7      49- freedom of movement
                  (1935)--gives employees    for workers within the
                  the right to organize      community (EU) &
                  and bargain                freedom to provide
                  collectively with          servicesArticle 7-
                  employer--Duty to          prohibits nationality
                  bargain bona fide for a    discrimination in
                  CBA                        employment agreements

Labor Law         Clayton Act (1914)-        Exemptions for
Exemptions        excludes labor unions      "sporting interest"
                  from laws against          only See UEFA's
                  restraint of trade and     "home-grown" rule
                  legalizes peaceful         discussion
                  strikesNorris-La
                  Guardia Act (1932)-
                  prohibits courts from
                  issuing injunctions
                  against labor Jewel Tea
                  & Pennington (1965)
                  non-statutory

Anti-Siphoning    1968- FCC prohibits        "Television Without
Provisions        selling of rights of       Frontiers" Initiative
                  certain events to          (Article 3A)- important
                  anyone but broadcast TV    events for society that
                  (Final Four, Super         should remain on free
                  Bowl)Challenged in         TV
                  1977- HBO v. FCC

Transfer of       Seitz Arbitration          Article 48 prohibits
Players with      ruling- Kansas City        sport rules that
Expired           Royals v. MLBPA (1976)-    require a new club to
Contracts--       arbitrator finds           reimburse former club
Drafts--Salary    reserve clause was not     for a player whose
and rookie caps   agreed upon (in            contract has
                  contractual sense),        expiredASBL v. Bosman
                  making play- ers free      (1995)
                  agents upon contract
                  expiration "Rozelle        CAS interpretation of
                  Rule" (1963)- new team     monetary compensation
                  must compensate former     owed to club for breach
                  team after signing a       by player
                  free agentMackey v. NFL    post-protection period
                  (1976)                     in Webster (2008): Only
                                             amount remaining in the
                  --Court finds Rozelle      contract, not market
                  rule a violation of        value
                  anti-trust laws

                  Powell (1989)--McNeal
                  (1991)/NFLPA
                  decertification--No
                  union, No CBA, No
                  exemption

                  NBA v. Williams (1995)
                  & Brown v. Pro Football
                  (1996)--Pro-employer
                  approach, exemption
                  survives impasse, after
                  bona fide bargaining

Players           Radovich v. NFL (1957)     Walrave & Koch v. Union
allocations--     --Court finds NFL in       Cycliste International
Trades--Team      violation of anti-trust    (1974)- Dutch
Relocations       laws for not allowing      motorcycle pacemakers
Restrictions      former NFL player to       want to work for
                  sign as a coach after      non-Dutch, ECJ rules
                  signing with rival         restriction
                  league Flood v. Kuhn       discriminatory
                  (1970)- Flood claims
                  trade violates SAA,
                  loses due to stare
                  decisis (Federal
                  Baseball & Toolson),
                  SCOTUS recognizes that
                  1922 decision
                  contradicts SAA
                  application in sport,
                  but only Congress has
                  power to amend

                  Raiders (1984)--Team
                  relocation =
                  pro-competition (also
                  see Seals, Grizzlies,
                  Clippers + prior league
                  approval)

Acquisition       Bowman v. NFL              Lehtonen (2000)--Court
Deadlines         (1995)--Court finds        finds transfer windows
                  deadlines restrain         discriminatory
                  competition                according to Article 39

League Entity     Fraser v MLS               Advocate General Lenz
Status            (2000)--Sports league      comments in Bosman
                  as a single entity with    (1995) that clubs do
                  branches (franchises)      not have CBAs, but
                  having no competition      rather horizontal
                  (only one league) and      relationships
                  therefore not violating
                  Sherman Anti-Trust Act     Oulmers settlement--
                                             ECA creation