The UEFA, the "home-grown player rule" and the Meca-Medina judgement of the European court of justice.

• Author: Manville, Andreas
• Position: ARTICLES - Brief article

The football season is approaching its end and we are awaiting the final in Europe's top league, the UEFA Champions League. Beginning this season (2008/09) the UEFA's Champions League regulation requires a club to register a squad compromising a maximum of 25 players, of which at least 8 players must be "locally trained players" (the so called "home-grown players"). Otherwise the squad must be reduced accordingly.

The aim of this article is to analyse the "home-grown player rule" with regard to the application of Article 81(1) and (3) EC, in particular considering the statements of the ECJ in the Meca-Medina case (1). Subsequent thereto, a short appraisal will be given with regard to Articles 82 and 39 EC.

The Regulations of the UEFA Champions League

"Conditions for Registration: List A

17.08 No club may have more than 25 players on List a during the season. as a minimum, places 18 to 25 on List a (eight places) are reserved exclusively for "locally trained players" and no club may have more than four "association-trained players" listed in places 18 to 25 on List A. List a must specify the eight players who qualify as being "locally trained", as well as whether they are "club-trained" or "association-trained". The possible combinations that enable clubs to comply with the List a requirements are set out in Annex VIII.

17.09 a "locally trained player" is either a "club-trained player" or an "association trained player".

17.10 a "club-trained player" is a player who, between the age of 15 (or the start of the season during which he turns 15) and 21 (or the end of the season during which he turns 21), and irrespective of his nationality and age, has been registered with his current club for a period, continuous or not, of three entire seasons (i.e. a period starting with the first official match of the relevant national championship and ending with the last official match of that relevant national championship) or of 36 months.

17.11 an "association-trained player" is a player who, between the age of 15 (or the start of the season during which the player turns 15) and 21 (or the end of the season during which the player turns 21), and irrespective of his nationality and age, has been registered with a club or with other clubs affiliated to the same national association as that of his current club for a period, continuous or not, of three entire seasons or of 36 months.

17.12 If a club has fewer than eight locally trained players in its squad (i.e. in places 18 to 25 on List A), then the maximum number of players on List a is reduced accordingly. Furthermore, if a club lists a player in places 18 to 25 on List a who does not fulfil the conditions set out in this article, that player is not eligible to participate for the club in the UEFA club competition(s) in question and the club is unable to replace him on List A."

I Scope and application of Article 81(1) (2) EC (3)

Article 81(1) reads:

"The following shall 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, and in particular those which:

a directly or indirectly fix purchase or selling prices or any other trading conditions;

b limit or control production, markets, technical development, or investment;

c share markets or sources of supply;

d apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

e make 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."

1) Scope of Article 81(1) EC

a) Scope of the EC Treaty, application of Article 81 in sport matters-"purely sporting rule"

The ECJ has ruled that having regard to the objectives of the Communities, sport is subject to Community law to the extent it constitutes an economic activity within the meaning of Article 2 EC (4).

Consequently the rule in question would be exempt from the scope of Article 81 if it did not constitute an economic activity and thus would be considered as a "purely sporting rule" which does not fall within the scope of the EC Treaty.

The rule lays down the criteria for setting-up a squad qualified to participate in the Champions League. a squad may have no more than 25 players of which at least 8 must be "home-grown players" (otherwise a reduced squad).

At first glance it seems as if it were a "rule of the game" like the rule that maximum 11 players may be in the playing team. The notion "rule of the game" comprises those "core" rules which are indispensable to run the sports competition. Therefore, it is in general accepted that it cannot be judged on those rules.

The "home-grown player rule" relates to size and the composition of a qualifying squad. However, to play a football match it is irrelevant whether the size of a squad is 25, 30 or even 50 players and whether there are "locally trained" players in the squad. Yet, there is an indispensable rule setting out how many players may be fielded-11 per team. That's what is needed to play a football match. There is, if any, only an indirect correlation given insofar as to define a minimum size of a squad. and equally, the composition of the squad is not necessary for the match. For a match, all is needed are two football teams with players.

Accordingly, the rule is no "purely sporting rule".

The rule sets out the conditions for clubs to participate in the Champions League. That means, it regulates the access to the sporting competition, which is in that case also the economic one; thus, the access to the economic competition is regulated (5) by the rule, too. and the original economic activity for the professional football clubs (at least) is playing matches. Such an economic activity falls within the scope of Article 2 EC.

Sporting activities and rules set up by sporting associations can fall within the scope of Community provisions as the latter ones do not only apply to the action of public authorities but extend also to rules of any other nature resulting from the exercise of their legal autonomy by associations or organisations not governed by public law and equally when the rules in question take effect in the Community they must comply with the European Competition Law. In the Meca-Medina case the ECJ decided in this way. It held that "if the sporting activity in question falls within the scope EC, the conditions for engaging in it are then subject to all the obligations which result from the various provisions EC." (6).

In its latest case, MOTOE (7) in relation to sports matters it decided similarly. The Grand Chamber held that, if the "... condition [of an economic activity] is satisfied, the fact that an activity has a connection with sport does not hinder the application of the rules EC ...". The ruling is of particular interest for two reasons. First, in a very clear and unmistakable way it confirms that sports governance is not regulated autonomously by the sports associations in a space free of any legal scrutiny and that all Treaty provisions, also the European antitrust provisions, are applicable and must be complied with. Secondly, the ruling resumes consequently the "spirit" of the Meca-Medina judgment (8) and clarifies that the application of the antitrust law was no "blooper" and the Grand Chamber confirms the Third Chamber's opinion to subject sports governance matters to the scrutiny of the European antitrust law.

Hence, the "home-grown player rule" falls within the scope EC and must comply with Article 81.

2) Agreements between undertakings or decisions of associations of undertakings

a) Undertakings or associations of undertakings

First, it must be tested whether the clubs, the football associations and the UEFA are to be seen as undertakings or associations of undertakings within the meaning of Article 81 because the European antitrust law refers to the activities of undertakings.

However, the Treaty does not define the concept of an undertaking. Nevertheless, according to the ECJ, the concept of an undertaking "encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed" (9). Furthermore, neither the size of the undertaking nor a profit-making intention matters.

Football clubs are economically active, e.g. by selling media rights, tickets or on the transfer market for players (10). Consequently, football clubs are undertakings within the meaning of Article 81(1). The football clubs are members of the national football associations. The national football associations are therefore associations of undertakings within the meaning of Article 81(1). Insofar as they engage in economic activities the national football associations are also undertakings themselves. The members of UEFA are the national football associations. UEFA is therefore both an association of associations of undertakings as well as an association of undertakings. UEFA is moreover an undertaking in its own right (11) as it also engages directly in economic activities (12).

b) Agreements between undertakings or decisions of associations of undertakings

The rule in question provides the admission requirements to participate in the Champions League and is therefore UEFA's regulatory basis for granting or denying a club's participation in the Champions League.

UEFA's Congress, the membership of which consists of the national football associations of which the football clubs are members, appoints the Executive Committee which adopts the Regulations of the UEFA Champions League. The Regulations of the UEFA Champions League are binding on the national football...