There is no question that the most popular sport in the world in terms of participation,
viewership and business is soccer. Although soccer gets more popular today in the United
States (US), the immense influence of the major sports football (NFL), baseball (MBA),
basketball (NBA) and hockey (NHL) makes it almost impossible for soccer to compete in the
US.
The soccer industry generates revenues running into the tens of billions per year; the Top 20
clubs alone generated around 4,4 billion Euro ($5,37 billion) in the 2010/11 season. Despite
increasingly high volumes of revenue, some European soccer clubs are in large amounts of
debt. For example, Manchester United, the most valuable soccer club in the world at $1.86
billion, has debts of $756 million as a result of the 2005 takeover by American businessman
Malcolm Glazer. To regulate the financial problems the Union of European Football
Association (UEFA) invented the Financial Fair Play rules, which basically require that a
team does not spend more than it earns.
Besides the lack of financial stability there is also a competitive and financial imbalance
between the clubs. The major US leagues created devices to prevent competitive and financial
imbalance by restricting players, player agents and the clubs through salary caps, revenue
sharing or a luxury tax. This thesis will analyze, if the devices are successful and if they
would work in Germany and Europe as well.
After an overview of the different structures of the leagues, it will be examined if there is
competitive and financial balance in the leagues and after an overview of the devices, if the introduction of the devices really creates financial and competitive balance. It will also be
reviewed if the rules are legally justified with a particular test of the Financial Fair Play Rules.
At the end it will be discussed how the devices can be enhanced.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Significance of the Major Sports
- Structure of the Leagues
- The Leagues Sport System
- Legal System
- United States
- Germany and Europe
- Competitive and Financial Balance
- Competitive Balance
- Financial Balance
- Legal Restrictions
- Description of the Rules
- Sharing Revenues
- United States
- Germany and Europe
- Free Agency and Restricted Free Agency
- United States
- Germany and Europe
- Rules for Players Changing Teams
- United States
- Germany and Europe
- Trades
- Salary Cap, Maximum and Minimum Salary
- United States
- Germany and Europe
- Sharing Revenues
- Do the Rules Achieve the Goal of Financial and Competitive Balance?
- Luxury Tax
- Salary Cap
- Salary Cap in Europe: Financial Fair Play Rules
- Purpose and Scope of the Rules
- Purpose
- Scope
- Requirements
- Purpose and Scope of the Rules
- Description of the Rules
- Legal Challenge of the Rules
- United States
- Financial Fair Play Rules Against European Law?
- Applying E.U. Law to Sport
- Financial Fair Play and Article 101 TFEU
- UEFA as an Undertaking
- Affect Trade between Member States
- Distortion or Competition
- Justification Wouters
- Existence of a Legitimate Aim
- Less Restrictive Measure
- Alternative 1: Reducing Club Compensation
- Alternative 2: Revenue Sharing
- Alternative 3: Ban of Trades
- Alternative 4: Luxury Tax
- Alternative 5: Salary Cap
- Justification Art. 101 (3) TFEU
- Financial Fair Play and the Obstacle to Free Movement
- Restriction Free Movement of Workers
- Justification
- Conclusion: Alternatives for the Bundesliga and the Major Leagues in the United States
- Bundesliga
- Collective Bargaining Agreement for European Soccer?
- Alternative: Salary Cap
- Combination Shared Revenue, Luxury Tax and Ban of Trades
- Alternative for the Major Sports in the United States
- Bundesliga
- Summery
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This work examines the legal requirements and challenges in establishing financial balance within professional sports leagues, specifically comparing the German Bundesliga to the Major Leagues in the United States. The paper delves into the legal framework surrounding competitive and financial balance, including rules on revenue sharing, free agency, player transfers, salary caps, and luxury taxes. Additionally, it analyzes the legal challenges presented by these regulations, particularly in relation to European Union law, focusing on potential violations of free trade and the movement of workers. Key themes explored in the text include: * **Competitive Balance:** The paper explores the concept of competitive balance in professional sports and how it is affected by different legal regulations. * **Financial Balance:** The text examines the legal framework surrounding financial balance within sports leagues, including mechanisms such as revenue sharing and salary caps. * **Legal Challenges:** The work analyzes the legal challenges posed by regulations aimed at achieving competitive and financial balance, particularly in the context of European Union law. * **Alternatives for Improvement:** The paper proposes alternative legal frameworks and mechanisms that could contribute to a more balanced and sustainable sports environment. * **Comparative Analysis:** The text utilizes a comparative approach, analyzing the legal framework and practices in both the German Bundesliga and the Major Leagues in the United States.Zusammenfassung der Kapitel (Chapter Summaries)
- Introduction: This chapter sets the stage by outlining the significance of major sports leagues and their unique structure. It delves into the legal systems governing professional sports in both the United States and Germany/Europe, providing a foundational understanding of the context surrounding the study.
- Competitive and Financial Balance: This chapter defines and explains the concepts of competitive and financial balance in professional sports. It explores how these principles are crucial for the long-term success and sustainability of sports leagues.
- Legal Restrictions: This chapter presents a detailed overview of the legal regulations designed to promote competitive and financial balance in professional sports. It examines different rules, including revenue sharing, free agency, player transfer regulations, salary caps, and luxury taxes. The chapter provides a comparative analysis of these rules in both the United States and Europe.
- Legal Challenge of the Rules: This chapter explores the legal challenges associated with the regulations aimed at achieving competitive and financial balance. It focuses on the potential conflicts between these rules and European Union law, particularly concerning free trade and the movement of workers. The chapter examines the application of EU law to sports, analyzes the potential violations of Article 101 TFEU, and evaluates potential justifications for these restrictions.
- Conclusion: Alternatives for the Bundesliga and the Major Leagues in the United States: This chapter presents a concluding analysis and offers alternative legal frameworks and mechanisms that could contribute to a more balanced and sustainable sports environment. It explores potential solutions for both the German Bundesliga and the Major Leagues in the United States, taking into account the unique characteristics of each league.
Schlüsselwörter (Keywords)
This study focuses on the legal aspects of achieving competitive and financial balance in professional sports leagues. Key terms and concepts explored include revenue sharing, free agency, player transfers, salary caps, luxury taxes, antitrust laws, European Union law, Article 101 TFEU, and the free movement of workers. The paper employs a comparative approach, examining the legal framework and practices in both the German Bundesliga and the Major Leagues in the United States.
- Citation du texte
- Max Randerath (Auteur), 2012, Legal Requirements and Problems to Create a Financial Balance between Professional Sport Clubs in the German Bundesliga, Munich, GRIN Verlag, https://www.grin.com/document/204957
