Football fans are used to poring over star-studded team sheets and debating controversial decisions. But the topic of post-match conversation is the roster of top lawyers on the club’s payroll and the complex legal victories they’ve won.
Football executives, lawyers and financial advisors agree that money is one factor that is particularly contributing to the legal issues currently occurring across the game.
Many now fear the situation risks becoming the new normal for the world’s most popular sport.
In a recent case, an independent commission this month declared the Premier League’s sponsorship rules unlawful following a challenge from Manchester City, but also upheld the principles on which they were based.
Both sides quickly declared victory in the arbitration, which included a highly unusual number of senior lawyers.
The City, represented by Lord Pannick KC (reportedly earning £5,000 an hour), along with two other Kings solicitors, three additional barristers and law firm Freshfields, said the regulation was no longer valid. said.
The Premier League, whose team includes three KCs, led by ‘Sporting Silk of the Year’ Adam Lewis KC, and a further four barristers instructed by Slaughter and May, is set to change its rules. He said that was enough.
Both sides are embroiled in a much larger dispute being heard in central London. The league alleges City broke financial rules over several years in pursuit of success. The club, which is owned by an Abu Dhabi tycoon and has won the English league title in six of the past seven seasons, vehemently denies the accusations.
A banner reading ‘Panic on the streets of London’ at Manchester City’s Etihad Stadium © Martin Rickett/PA
The battle is just the latest in a series of lawsuits that could reshape the business of soccer. Earlier this month, the European Court of Justice ruled that transfer market regulations drawn up and enforced by soccer’s world governing body FIFA are illegal, following a challenge from former France international Lassana Diarra.
FIFA has downplayed the impact of the ruling, but Diarra’s lawyer said the legal framework governing transfers had been “ripped out at its heart” by the ECJ, adding: “The system is dead.” .
A few days later, a joint action against FIFA was launched by the players’ union FIFPRO and the European League, the governing body representing domestic competitions such as Spain’s La Liga and the Premier League. The group claims FIFA’s decision to launch a modified version of the Club World Cup puts players’ health at risk and violates EU law.
“We are now increasingly seeing competition law being used as a sword rather than a shield,” said Simon Leaf, head of sports law at Mishcon de Reya. “I hope to see more of that.”
At club level, football ownership has changed with the rise of private equity, sovereign wealth, hedge funds and billionaires. Gamers say the influence of organized capital is eroding the old system in which disputes were often resolved behind closed doors.
One executive said there are now club owners with a fiduciary duty to pursue their own narrow interests by any means necessary. This situation has exacerbated the divide between those who believe tighter spending controls are essential for sustainability and those who believe they hurt competitiveness.
“People have lost that sense of consensus. It’s a pretty dangerous dynamic,” said another executive working in European football. “Defining what is in the best interest of the game seems to be getting lost, and that’s creating a chasm for lawyers to step in.”
At the competitive level, soccer’s goals are divided, particularly between those who want to make soccer more global and those who want to protect domestic competitions.
“We are eating ourselves. We are at risk of destroying this beautiful product that we all love,” said another football executive. “It’s a very complicated web now. I don’t know how we’re going to get back to what we were before.”
Soccer has become fertile territory for big law firms. Clifford Chance has been representing City in their battle against the Premier League, successfully competing against UEFA and FIFA in a way that beat the breakaway leagues of Europe’s elite clubs. The Premier League has appointed Bird & Bird to handle the City case and Linklaters for other legal matters relating to financial rules. While Dupont Hisel won the Diarra case, Garrigus is representing the European leagues in a joint lawsuit against FIFA.
Fans in London protest against the proposed European Super League in 2021 © Charlotte Wilson/Offside/Offside via Getty Images
The amount of money flowing around football is increasing, and the game’s stakeholders, from owners to players, leagues to governing bodies, have more to contend with.
FIFA’s revenue from the 2022 World Cup in Qatar is expected to reach $7.5 billion and exceed $10 billion when the tournament is held in the United States, Canada and Mexico in 2026. UEFA, which oversees the competition in Europe, earned 4.3 billion euros in revenue for the 2022-23 season, thanks largely to television funding from the Champions League.
“The game has grown tremendously, but the rules haven’t kept up,” said Yasin Patel, a sports lawyer at Church Court Chambers. “People who are invested in football are challenging the governing bodies and saying, ‘Why can’t we do this?'”
The wealthy are also under increased scrutiny. The ECJ ruled late last year that both UEFA and FIFA had acted unlawfully when they threatened the 12 clubs attempting to launch a European Super League in 2021. The ruling firmly brings soccer under competition law and opens the door to further legal challenges. various problems.
The executive branch has suffered other legal setbacks in the past 12 months. In December, a tribunal appointed by the English Football Association ruled that FIFA’s planned regulatory reforms for agents were illegal. And in April, FIFA settled an antitrust lawsuit brought by Relevent Sports, a promoter seeking to bring European league matches to the United States.
The series of incidents comes at a critical time for the soccer business. In Europe, a long period of broadcast revenue growth appears to be coming to an end, with several leagues renewing their television contracts at discounted rates. As a result, some club owners are increasingly pushing for changes to the status quo, including tighter spending limits. “When the money keeps coming in, it’s easier to keep people happy,” said one club football executive.
In a sign of how quickly such problems have escalated, the Premier League’s legal costs rose from its usual budget of £8m to around £45m last season.
There is optimism among football executives that the rivalry will begin to subside after the outcome of the Premier League’s legal case against City in the new year.
Many expect chaos to continue regardless of the outcome, but others hope it will be an opportunity for a reset. The Diarra scandal may prove to be less shocking than claimed, with a new regulator for English football in place and memories of the European Super League scandal fading.
However, many in the gaming community are concerned that the lawsuits will continue. Some of the smoldering issues in English football could be challenged, from parachute payments (additional money given to clubs relegated from the Premier League) to television blackouts at 3pm matches.
Club owners may also be encouraged by Leicester City’s successful appeal after the Premier League accused them of breaching financial regulations. The result shows that long-standing rules are not foolproof, with Leicester fans pouring out messages on social media praising KC and Blackstone Chambers’ Nick De Marco for his role in the case. Posted in.
De Marco later wrote on LinkedIn: “The growth of lawyers in football was not caused by people like me, but is the inevitable result of complex financial and ownership rules, competition and money at stake.” I wrote.
Leicester become the fourth top flight club to face legal action over alleged breaches of regulations in the past two years, following City, Everton and Nottingham Forest. Blackstone barristers were once again involved in each of the three cases, with Pinsent Masons representing Everton, Squire Patton Boggs representing Forest and Linklaters representing the Premier League.
Meanwhile, people familiar with the matter say there is an impasse within the Premier League board due to the current legal dispute and concerns of a new legal dispute. Great uncertainty surrounding everything from spending rules to player transfers has also cast a shadow over soccer in the eyes of investors.
But some in the game see the legal battle as a positive process that could help football governance catch up.
One of the people familiar with the joint complaint by FIF Pro and the European leagues said it was likely to foreshadow further actions coming down the conveyor belt that could shake up the way the sport is run. “is a new world order,” he added.
Additional reporting by Samuel Agini
