Competition in Sports Law

[Music] Hello and welcome to another podcast from Brick Court Chambers. Today we're talking about Sports Law and competition, a hot topic in recent years. And this podcast is really a spin-off from a morning roundtable that we held at Brick Court earlier this year, at which we had a lively and super informative discussion about this very topic. My name is Tim Johnston. I'm a barista at Brick Court Chambers practicing in competition law, public law and public international law. And we have a real treat today because you don't just get to hear somebody from Brick Court Chambers. You get to hear the wonderful Katie Curry who is a partner at RBB. Now if there's anyone who doesn't know, RBB are a globally leading body of advisors and experts in competition economics. They have 17 offices worldwide and Katie is a partner in RBB at London and a highly experienced expert witness in all things to do with competition. So the way we are going to run this podcast is that we're going to weave back and forth a little. So I'm going to kick off for a few minutes, but then Katie will take the reins before her new wreck to me and then Katie will bring us into land. And as we go, we're also going to be asking and also hopefully answering a few questions. So I'm going to go first as I said and just really lay some some groundwork. Why sports law and competition at all? Why did we have a round table on this topic? And why are we now doing a podcast on it today? And I think the answer really falls into two parts or two reasons. First, sport is a massive industry in this country and we've seen an increasing number of competition cases that relate to sporting rules or decisions of sports governing bodies in the last few years. And the second reason is that there's been a major change or change in tone at least in the answers being given by courts in that period. Whereas three or four years ago, the major thrust of my talk would have been that the key takeaway or the key point to take from the case law in this area is that there are really significant limits to competition laws interface with sport. Now sat here today in early 2026 that question is almost turned on its head and becomes what if anything are the limits of competition laws capacity to impact on matters that we might previously have assumed were pure questions of sporting regulation. So with that introduction done the first five minutes from me are going to be a rather brief whistle stop tour of how we got to where we are now. And as you probably know, it's long established in European law that sports rules and decisions of sports governing bodies for at least in principle within the scope of articles 101 and 102. However, there's also an equally powerful principle well established in the case law that where a decision of a sports governing body was a decision taken in relation to or facilitating a sporting competition. Competition law should tread lightly if at all. And that was what was known as the sporting exception and that exception dated all the way back to a case called while rather than cook and the justification for the exception. And sporting rules and sporting competitions had their own logic and their own rationale and for that reason competition law should not interfere with rules that are in place for the purpose of enabling sports competitions to operate. Now the first major crack in that facade is the famous case of mecha Medina in 2006. This was a case brought by two swimmers who complained that the anti doping rules of the IOC unlawfully restricted competition. Now just pausing there for a moment that's a rather bold case. It amounted in some ways to saying I've been taking steroids, but it's an unlawful interference with competition law to stop me swimming. At the Olympic Games and what the Court of Justice held in relation to that case was very important and also an important departure in the case law. The starting point in relation to mecha Medina is that the court changed at least the tone of the existing case law by stressing the narrowness of the sporting exception. In order to fall within the exception, the relevant rule had to be quote "purely sporting in nature". And it's only then that it wouldn't engage the treaty because it doesn't affect competition in the European Union. And that's because even though the claim, the facts of the claim were somewhat outlandish, the court found that it was nonetheless still appropriate to assess the doping rules in order to determine whether they did unlawfully interfere with competition law. The court didn't say, and this is the interesting point about mecha Medina, the court didn't say, "Well, this has just got nothing to do with sporting competition at all because it's a sporting rule." And the test that had to be satisfied, and that's the test that was applied consistently in the following years, was that the sanction imposed had to be in pursuit of a legitimate objective. It had to be necessary, and it had to be proportionate. So the Court of Justice went on, it applied that test, that principle, and concluded perhaps unsurprisingly that the anti-doping rules in question were obviously lawful. In the following years, there were attempts to bring claims relying on the mecha Medina case principle, mecha Medina case law in the CJA U, in CAS and in the UK courts. But the overarching narrative of those cases was how difficult it was to bring home a sports law case on competition grounds. And what most of those cases repeatedly affirmed was that governing bodies enjoy a considerable margin of appreciation, and that the mecha Medina test, in its application, was rather favorable to defendants. So for that reason, you might think that mecha Medina didn't do very much to change the law. But when I was researching in preparation for our round table earlier this year, I came across the response of the director of legal affairs at UEFA to the mecha Medina judgement in 2006, and it's fair to say that the gentleman in question took a rather different and a rather vigorous view. In response to mecha Medina, the title of the document, this is the official way for response, the title of the document was mecha Medina, a step backwards for the European sports model, and a specificity of sport, question mark. And it was a forthright and a furious attack on the judgement, and just to quote from it, so you get a little bit of the flavour of the tone of this. Now with the greatest of respect to the judges in Luxembourg, should judges, charged with the application of EU law, be the ones to decide whether a ban imposed on a swimmer, should be two years or 18 months, especially after two previous hearings by an independent sports tribunal, on exactly the same matter, exclamation mark. And what on earth has this all got to do with European competition law? One wonders if the founding fathers of the Treaty of Rome had in mind the impact of anti-doping penalties in sport when they drafted the treaty articles regarding economic competition. Now the reason I read out that passage in some detail is too far, firstly, because it reveals, I think, what was always latent in the case law, post mecha Medina, the risk that judges might pick up the cudgles and start to find that sporting rules were unlawful on competition law grounds. And second, because the author of that particular press release is a man who, on any view of the world, operates at the interface of sport and politics. Because it's signed, Mr. Gianni in Fantino, of course, is now the head of FIFA. So Mr. Infantino, at least, saw the longer term possible consequences of mecha Medina and the possible risks that it foretold for sports governing bodies. So, dialing forward more than 15 years from mecha Medina to December 2023, free triple judgments from the Court of Justice. In the European Super League case, the Ice Skating Union case and Royal Antwerp Football Club, and these triple judgments heralded a major change of approach in relation to competition law and sport. Now, each case turned inevitably on its own specific facts, but each of them brought home the threat identified, perhaps rather pressiantly by Mr. Infantino. In 2006. Now most talks and lots of the analysis of these judgments has focused on the Super League case, possibly because it's the best known and the most high profile of the three of them. not just for novelty sake, but also because I think the implications of the other judgments are potentially more wide-ranging. I'm going to touch in slightly more detail today on Royal Antwerp and Ice Gating Union, and only briefly on the Super League case. So, starting with Royal Antwerp, that was a case concerned with the number of homegrown players that there had to be in a football squad that competed in National and UEFA competitions, and the judgment affirmed that there were some rules that could, in sporting contexts, be adopted solely on non-economic grounds. But what immediately leaps out of that judgment is how narrow that special sporting exception is, because the court said that anything with an indirect impact on the paid work of sporting competitors falls within the scope of competition law. So, the rules on homegrown players fall squarely within its footprint, and so they were subject to a full competition law analysis, because rules about how many homegrown players they have to be in a squad are not a rule about how the sport is played on the contrary. They have a sufficient nexus with the economic activity of playing sport. And that is why I think Royal Antwerp is particularly interesting, because a rule about homegrown players might be thought to be just a rule about how the sport is to be played, that we now know that it's not. And what that does is to narrow the sporting exception down to a very narrow footprint, the rules of the game, and certain other matters around that. So, Royal Antwerp is important for that reason, it's also important in my view, because it knocked on the head, the idea that Article 165-TFEU provides overriding reasons in the public interest to restrict the reach of competition law into sport. Moving on briefly to touch on the ice skating union case, this was a case about banning participants who had participated in other sporting competitions, not organised by the ISU, from its events. And the major point here of some importance is that the CGEU affirmed that the Mecha Medina line of reasoning can only apply to infringements by effect, not by object, and that's in paragraphs 111 to 114. So, it undercut the primary defence that sports governing bodies had been advancing for years in relation to challenges of this kind to the extent that they related to a potential object infringement. Super League is of course the best known case of these three, it's about the attempt to set up a rival sporting competition, and UEFA had killed that stone dead by saying you cannot participate in the Super League and in its competitions. And their court famously held that any rules that fall within the scope of competition law must be transparent, must be clear, must be precise, so that they're not amenable to being abused in an arbitrary manner. And that's the key proposition that is often being relied on arising out of that judgement. But these judgements held the taking numbers of three was a really important narrowing of the scope of the sporting exception, and they reveal an important new willingness, in my view, on the part of the court to roll up its sleeves. On the basis that governing bodies are involved in the economic activity of sport itself, or at least in a regulation of it, so whereas previously a wide degree of latitude was granted to sporting bodies, these judgements show rather less difference. Now, at that point I think I've been rattling on for much too long, and it's time to hand over to Katie. Thanks, Timon, and thanks for that excellent introduction to the topic. Before we move on to some of the economic issues, underpinning this sporting specificity, I just wanted to pick up on a few points coming out of your opening remarks. Firstly, why do you think the courts have now narrowed the sporting exception in this way? The question, I think the interface between competition law and sport is always really underpinned by public policy. It is in a really important way driven by public policy concerns. The focus of the interface between sport, law and competition changes over time and it comes in waves. So, dial back 7, 8, maybe 10 years. And the focus was very much about state aid, and infrastructure, sweet heart deals for stadiums, Real Madrid was a good example of that, but there are a number of others all across Europe at the time. And then, when I come forward from there, the focus on the sporting context was very much about ownership tests, and in particular, possibly the interface between ownership tests and sanctions arising out of the Ukrainian war to some extent, but also more broadly now post December 23 in particular, the focus is on rules that restrict economic activity. Part of all of this changing focus and changing case or really is a debate about where the sport should be treated as normal economic behavior. And these judgments show a greater boldness on the part of the court of justice. They've definitely changed the mood. And as I said earlier, I think really they flip the question. And the question now is, why should sport be treated differently? Why is it so special? And there's rather less difference being shown than we've seen in the historic case law. I think that point about sports being special is a really interesting question and one that I want to return to in a moment from an economic perspective. But before we do, just finally on the sort of opening remarks, do you think there any limits to this new approach in the case law in terms of the narrowing of the sporting exception? That's an open question. I think I'm going to be returning after you've heard some proper economics from Katie in my second part of my presentation to talk about that to a degree. But for these purposes, there definitely still is a sporting exception. And I think it's worth bearing in mind that the outcome in royal Antwerp is only that the rule forced to be assessed, not that it infringes competition law. And we don't yet know what the outcomes going to be in the Belgian courts that said, as often in these judgments, there is a clear tone from the Court of Justice is reasoning that it at least might perhaps does in French. And as I said earlier, I think the reason that that case is so interesting is because it is the closest example to a sporting rule and it's going to be really interesting to see how the national courts grapple with that. So I think there is still going to be some deference shown in relation to certain kinds of decisions and certain kinds of rules. But in particular, in relation to rules and regulations, the extent of deference that we've seen, it is going to be really rather limited. And I'm going to come on later to talk about some other cases that are still up and coming that may give us some straws in the wind. OK, that's quite enough law when we're talking about competition law, we definitely need to have economics right at the heart of it. So Katie over to you, but starting if I may with a question, which is from an economics perspective, how do sports markets differ from standard product markets? Thanks Tim. So I think to answer that question, I'm going to start with with a snapshot of how things look today and then talk about the inherent market features that have led to them developing in in the way that they have. So let's take the way that they look today. And I think a striking feature of most sports markets is that they just look structurally different from standard product markets in almost any sport in the world. You'll find a regulatory body that's in charge of setting, communicating, monitoring and forcing the rules of the game. And more often than not, that same regulatory body will also have a financial interest in the commercialization of the sport, often via an ownership stake in the incumbent league. From a competition perspective, this sort of dual role of regulator and commercial interest gives rise to potential conflict of interest in the way that those rules of the game are enforced. The regulatory body that has the power to enforce those rules, including rules like which rival leagues can can enter the sport and host alternative events is also the same entity that stands to lose commercially from any successful entry attempt. So combined with the sporting specificity that you just so beautifully described that has historically granted sports bodies a lot of latitude in the application of competition law and you get some situations you just wouldn't see a rise in other markets. I mean, I challenge the idea that you would get a parallel to the ESL case in a standard product market would test go, for example, get to decide the criteria under which rival supermarkets get to enter the sector or would open reach get to tell off what the telecoms regulatory framework should be, you know, clearly not. And yet we are getting parallels being debated on these very points in the sporting sector. So cases and economists do you think there is a case for sports markets being treated differently when it comes to application of competition law or should we see it through that lens it should just. treated just the same as Tesco or OpenReacher or any other commercial operator, substantial commercial operator in their market. It's a very difficult question and I think that there's two possible approaches. One is that, you know, competition law just shouldn't apply and fall here because the sport sector is so different. And I really think there is a case for that. Firstly, sport as a sector just has huge social and educational value. People really care about sport. It has a unique place in our culture. When England qualifies for the World Cup, there are flags everywhere, the pubs are full. Everyone is very engaged nationally in this competition. But it's a lot more than that. The positive impacts that promoting grassroots sports has on health and well-being across the economy and also promoting trust and inclusion within communities is absolutely vast and studies estimate it running to hundreds of billions of pounds per year in the UK alone. This very unusually high social value means that if left to an unregulated market is sought out, economics tells us you'll almost always get significant underinvestment because private investors can't or capture these massive social returns. So we end up in a situation where there's suboptimal levels of investment compared to where we should be socially. I think practically speaking as well, the fact that we care so much about it as a society means that it's an area that competition authorities and courts have just been very afraid of messing with. You know, it's something people feel passionate about and they feel passionately that it's going well. So as a competition body, you know, you interfere with extreme caution. Secondly, when I look at these sports markets, I think a really defining characteristic is how they need explicit coordination between rivals and between different market participants just to exist. So in a standard product market, if you get explicit coordination between rivals, you know, almost inevitably alarm bells are ringing that there could be some sort of anti-competitive collusion at play. But here in a sporting context, to organise some sort of sporting competition in the first place needs explicit coordination because you need both sides to turn up on the same day at the same time and place. If you want that competition to be organised according to sporting merit, you need to have agreement on what the rules of the games are and also on who's going to enforce them. I think that there's a case for coordination that goes beyond that as well. There can be a lot of value generated from having a narrative of competition throughout a season and that requires coordination between different clubs who are on the one hand economic rivals but also sort of co-creators of value. And to ensure sustainability at this sport, there's a need can be a need for coordination on investment into the talent pipeline to prevent some clubs riding, free riding on the investment of others. So coordination, I think it is a key distinguishing feature. And then the final point that I think makes sports really interesting is that, you know, typically when we apply a competition or there's the presumption that having more competitive markets makes for better outcomes. It's sort of a basic condition of competition law to generate good outcomes. But in sports markets, having more competition can actually make things worse. And so why is that? Firstly, unlike standard firms who would tend to benefit from eliminating their rivals, sports teams and players actually need their rivals to exist in order to generate value and match is only interesting to their fans if there's a club worthy of turning up to play against. And that gives rise to significant what we call in a Chromeics externalities between the market participants and these are costs and benefits that one club or player or league imposes on other market participants that they don't bear the cost or benefit of directly themselves. So they don't take it into account when making their own commercial decisions. And a good example of that relates to some of the rules around what clubs can spend on players. If one team becomes too successful because they have loads of money and they get to hire all the best talent, well, if they just win contest after contest after contest and the unpredictable ability of the competition is eliminated, well, the value of the entire product could decline and that would be harmful to the whole league. So economically that puts sport in a different category from a lot of standard markets where the commercial success, a one entity, depends on the crucially on the survival of others. But in an unrestricted market where competition is allowed to occur without any guardrails, teams won't and players won't take that commercial impact into into account when they make their decisions and they won't make decisions that are in the best interest of the sector as a whole. So as a result of all these factors, I think inevitably some restrictions on competition at various levels in the supply chain end up being necessary in order to maximize the social benefits from this really important sector and ensure the future of the sport. But the problem is that recent judgments are telling us that these rules which can be used to the benefit of the sector can also be used to preserve and exploit market power. So prior authorization rules which restrict competition between incumbents and breakaway leagues like the ESL, they help ensure that only leagues that are adhering to the rules of the sport and contributing to the player talent pipeline are allowed to enter. But at the same time if they're used in an arbitrary manner at the discretion of the body that has a commercial interest in keeping rivals out, well that can be unlawful exploitation of market power. So I think where we end up is a situation where if competition law does indeed apply in full, I think there are very strong potential efficiency rationales that could be evidenced, drawing on these very significant social benefits, the fact that a lot of these restrictions on competition are necessary in order for the sport to exist for its future to exist. But if competition law does indeed apply in full, then these efficiency benefits would need to be evidenced and demonstrated that they are proportionate in relation to their state of aim. First Katie that's super interesting. So the podcast football passes back to me now and I'm going to chat for just a few minutes by way of offering up very dangerously and perhaps unwisely some futurology which is to try and ask really where are we going with competition law and sports cases and really three points to round out that question first. Perhaps an obvious one we're already seeing an acceleration of the use of competition law in sports cases and we were seeing that before, well I think I called earlier the triple whammy of ESL, I skating union and Royal Antwerp. But those judgments are only encouraging that trend and we've seen that trend continuing into subsequent decisions. So the at least partial success of Manchester City and its challenge to the associated party transactions rules in late 2024, I think only adds fuel to the fire. If you're sat inside your legal team asking yourself, do I bring this challenge to this rule or the application of this rule, then we are certainly getting positive encouragement and just in terms of how many cases there are on going at the moment and that certainly reflected in the kind of work and in the kinds of cases that are being brought. I think another good example of that would be the success of the Lissandra DRR case in relation to the UEFA transfer rules that were also found to be an object infringement and so weren't able to take the benefit of the Mecha Medina test. And at the same time we've also seen that there have been a variety of sometimes slightly contradictory I think judgments about the agent's regulations. But at least as things stand, UEFA has suspended at least a part of those rules because of competition law concerns. So the field remains ripe I think for more of the same. Perhaps one case to watch in this context, I'm obviously biased because people at Brickwater involved in this case is the snooker case that's happening. But the reason I draw particular attention to that I think is because it's happening in the competition appeal tribunal and lots and lots of sporting competition or cases are resolved by way of arbitration. That's been my experience in many, perhaps most of the cases that I've done, they've been arbitration and so we don't get to see other than in rare cases like in Manchester City and part we don't get to see the outcome. Sometimes we don't even know that the dispute is taking place. But the snooker case, which is all about whether or not well snooker unlawfully prevented arrival from entering the market and running its own snooker competitions, is going to be super interesting because it's going to play out in public in the competition appeal tribunal. So we'll get to hear what the experience is and we'll get to see what the tribunal makes of it. But I suppose for litigation enthusiasts of which there may well be many listening to this podcast, something I think also of a cautionary tale in the recent RRC Sports Agents regulations case that's been heard before the Court of Justice in respect of which we've got an advocate general's opinion, but we don't yet have a judgment. That opinion was also published alongside advocate general Amelieus opinion in the Rogon case which is also from Germany. relates to agent's fees and at the same time the ton delicates the no-poaching rule in relation to COVID. And these three cases together are, I think, fascinating to watch because they are going to provide the next triple whammy of sports competition, law judgments. And actually what stands out to me at least from those opinions is that I think they take a more sympathetic tone from the perspective of sports governing bodies. So the opinions all affirm the macamadena principles are not available in cases of an object infringement. But on the other hand, they went out of their way to stress that within the context of a discussion about restrictions by effect there must be an attitude to sports bodies acting in the public interest for all of the reasons that Katie was talking about earlier, particularly, and this is a new departure, particularly the advocate general has said where the governing body has been recognised by public authorities. And the focus of the opinion seems to be to revive the sporting exception, albeit obviously in the context of an effects case. And I think what will be really interesting to see is to what extent arguments about the investments that governing bodies put into grassroots sport and the importance of sporting solidarity might have in future judicial thinking. So it's not at least at the moment pending the judgments is not all one way traffic at the moment. And the question we were all asking is will the next triple whammy signal the start of a rowback or at least some part of a rowback or is sport really just being brought within the context of regular competition law and is the sporting exception being narrowed down to rules about just the game itself. So the answer that is we're going to see more cases of this kind and so one no more, but in particular watch these three judgments. My second point is to ask the question is mecha Medina making a bit of a comeback. Now I've already touched on this already, but the key straw in the wind in that respect is the RRC case about agents fees caps and other controls on agents. And the reason that this opinion was important is that the advocate general suggested that restrictions on agents fees are not to his mind restrictions by object. Now as many of the listeners will know an object restriction is one that's inherently or of its nature harmful to competition. And the advocate general said that these kinds of restrictions on fees and rules about representation and so on and so forth were not restrictions by object. And so that then brings mecha Medina back into play. And in the rogue on case, interestingly again, the focus of the advocate general's opinion was on his conclusion that the rules were lawful even though they regulated an associated market, the market in agents, they could be justified at least in principle by reference to the objectives and priorities of sporting competition. So there is a kind of typology of the logic to these opinions. The first question is, is this an object? And on that there seems to be a rather sympathetic approach to the question whether it is an object or an infringement by effect. If you're into looking at an effect possible infringement, then you're into mecha Medina and you get to take the benefit of the sporting exception. And if not, then look at one and one three. So the overall mood music is that I think at least within these opinions, there is a general term of slightly returning to deference or at least respect, maybe perhaps rather than deference in relation to sports governing bodies. And that brings me on to my third point, which is is one oh one three having life breathed into it because the traditional view of competition lawyers is that once you're relying on one oh one three, you are slightly in the last chance saloon in terms of your analysis. But advocate general and media goes into this in real detail in the RRC opinion at paragraph 82 to 95. And there's quite a long plea there for a more generous and full approach to one oh one three and justification in the sporting context. The basic point being made is true. It is following super league. The evidence that you rely on can't just be entirely vague. It's necessary to show that there is a fair share of benefits for consumers. But there's also a very clear plea here, I think, not to write one oh one three off. And what's interesting to me is that one oh one three wasn't even mentioned in the reference. And there seems to be the view of the advocate general that it probably should have been. And I think the logic of the opinion is if we're looking at an object infringement, so we're not into mecha Medina, don't give up because one oh one three may be your friend. And I think that ties back into all the things that Katie was talking about earlier about all of the different positive benefits associated with sporting competition and making building a case for a fair allocation of benefit. So pulling all of these threads together, I think we're going to see plenty more competition or sports cases, particularly in relation to rules that restrict participation in either rival sporting contest or in other ways. And secondly, I think it remains to be seen quite how special sport is. We know that article 165 is a dead letter post-war land work, but the question now is whether the change of tone in these recent opinions is going to carry through into the judgments of the court. And are we going to see any further willingness to recognise the unique features of sporting regulation either when assessing whether a rule or a decision is a restriction by object, or at the mecha Medina or one oh one three stage of the analysis. Katie, over to you. So Tim, I think you made an excellent point earlier that in deciding the extent or to which competition law should apply and how it should be applied to sports in the future is all going to come down to the solidarity principle. And so I wanted to talk a bit about the solidarity principle, what it means while it exists and what the recent judgments we've been talking about imply for solidarity and the European sports model more broadly. Solidarity, a very simple concept really, it's a form of redistribution from the elite levels of the sport, which typically generate huge amounts of money down to the lower levels and grassroots of the sport, which need significant public funding in order to exist. So the reason that we don't get that much investment in the lower levels and the grassroots of the sport is quite obvious, no one will pay that much money to turn up and watch my community football team play a match. And yet as we were discussing earlier, the fact that sport is accessible throughout communities offers opportunities to all and offers opportunities as well for them to progress up to the very top levels of the sport through sporting merit. And that is because of significant funding right down to the very grassroots. So where does that funding come from? In an unregulated market, no commercial investor is going to put their money there because they will not reap it back. So I was talking earlier about the very high social benefits of this investment, which is in itself a very good case for some sort of restriction on free market mechanisms. But another really important aspect of this investment from an economics perspective is that this investment in youth play development and grassroots of the sport has characteristics of public goods as well as a social good. What do I mean by public good? Well that's something that has two important features. Firstly, it's very difficult to exclude those who haven't contributed to its development from benefiting from it. So for example, a fan going to watch a sport smash the fact that that talent has been developed from the grassroots, they don't need to contribute it and yet they can go along and benefit from watching it. Clubs who approach ready-trained players and also people who live in communities where trust and inclusion has been fostered as a result of community sport. You can't exclude those people who haven't contributed from these multiple benefits. And the other thing is that related concept is that the benefits from investment in sport are often non-rival risks in the sense that the benefits I get from living in a community where there is more trust and inclusion. Those benefits are not diminished by the fact that my neighbour also benefits to the same extent from those. And those key features on top of the social returns will lead to a situation where we're left to its own devices. We get significant underinvestment in sports development compared to what we would get under a socially optimal outcome. The principle of solidarity has been the European sports response to this problem. And it's sort of solidarity is really seen as the cornerstone of our sports and the pyramid structure that so many of them operate by giving opportunity to everyone promoting sport in the communities and allowing players to progress from the grassroots to the very top on the basis of sporting merit alone. Redistribution helps support all of that. Redistribution via solidarity payments also helps to maintain competitive sporting balance throughout the leagues and helps to ensure that for example when your football team gets relegated, there were there were systems of solidarity that mean it's not financially harmful but it's not financial disaster and there are chances of them returning to the top tier again which helps to maintain that sense of excitement as a fan and the uncertainty in the sporting outcome. What do recent judgments mean for solidarity? Well, it's come up a lot because it's often argued as an efficiency defense. So, the reason why many of these sporting rules exist are to protect this model of solidarity. So, prior authorization of rival events to, in the case of ESL, sanctions on players participating in rival events and in the case of the ISU, these exist in order to ensure the sustainability of the sport. Because if rival leagues can just come in, if ESL can just come in and set up a rival tournament, steal all the best talent without contributing to the grassroots, then this system of redistribution of investment in the grassroots of the sport just completely collapses. The problem with advancing a principle of solidarity is this question of conflict of interest that we were speaking about at the start and the fact that sports governing bodies don't just exist, much as they say they do, to maximize the benefits to the sport as a whole. And they all also have commercial entities. And they, as commercial entities, they have a financial interest in keeping their rivals out of the market in order to maximize their own profitability. So, making it harder for rivals to enter the sport, that can be a good thing because it protects solidarity. But it can also be a bad thing because it reduces dynamism in sport by reducing dynamic competition and the threat of entry. And the problem with that situation where it's harder or for entrance to come in, and it's sort of up to the sports governing body who succeeds and who does not, is that fans don't really get a choice in the matter there. And there does seem to be sort of something missing from that equation where fans don't get to express the matches they choose to watch and attend, which leagues should succeed and fail, but the governing body who benefits commercially from remaining the incumbent in control. So, I think this question of solidarity is super important, it is what keeps the sport going. But it's not something that can be just asserted, I think, any more. That is what these judgments tell us. As a governing body that has a financial interest in excluding rival competitions, if you want to advance the solidarity principles of defence, then you are going to need to have strong evidence that the sporting rule, which is being contested, is necessary to achieve and support that. And also, there's no less restrictive means of achieving that same outcome. Which maybe why the advocate general is encouraging us all to think rather than more about 1013, which is a thought that I hadn't kind of reflected on before, but I found that really interesting. So, how far can you take these arguments? Do you think sport is a natural monopoly? I think that's a really, really interesting question. I think it's where this principle of solidarity will ultimately take us. If we really buy into solidarity and we buy into sports are so socially important, and what we need to do is sort of maximize the value generated by the sport at top levels, so that it can be plowed back into the grassroots. Then the natural response to that is, well, yes, the best outcome for the sector as a whole is to have a stable monopolist in charge of maximising the rents generated at that top level on the provider that they are then redistributed down through the pyramid. The slight problem I have with that is that once you give up on the notion of competitive entry, you lose the possibility for dynamic rivalry. And as an economist, I'm aware that those benefits can be really significant, and I think particularly significant in the sporting context. We only need to look at the success of some of the innovative formats that have been brought to sports that have perhaps appealed to a particular demographic in the past, say cricket and golf, and that demographic was sort of declining in the sport was becoming less relevant and less important. And these new innovative formats came out expanded, they appealed broadly to capture whole new fans who'd never been interested in the sport before, and generated significant value to the sport in that way. If we look at the IPL as an early success story for one of these innovative formats, the IPL brought the T20 cricket format to the domestic league there in India. And today it is one of the most valuable sports leagues in the world, second only to the NFL, with media rights. The most recent media rights sale, I was reading this morning, went for over $6 billion US dollars. And I think that works out as approximately £6 million a match for their sports media rights. So what that tells us is that there's huge fan value to bringing new innovative formats to the game. But as an economist, you are more likely to get that sort of innovation if you don't give up on the prospect of dynamic rivalry in the first place. So I think where that leads you is a really difficult trade off between protecting solidarity by maximizing rents at the elite levels, whilst also remaining open to the prospect of dynamic rivalry that could help continue this future success of the sport by making sure it continues to our board appeal. Now the cricket examples are really interesting one, I think, because of course the ECB has launched its own even shorter than T20 format in England, the hundreds, which is a product that is explicitly targeted at demographics that don't ordinarily come watch cricket very cheap tickets for children trying to kind of change the change to appeal of the sport. But it's being introduced in that context by the monopolist, so that's what's interesting about it. They're trying to bring this kind of dynamic competition in, but they're doing it from the position of being the monopolist and whether or not the hundreds of successes still I think an open question commercially at least. And I suppose maybe you might say if it fails, it's an example of the monopolist being insufficiently dynamic and insufficiently creative bringing in a new product that's that's going to add value to the game. The problem with the monopolist innovating is that it will it stands to lose more in successful innovation because that cannibalizes its existing demand base. So the type of innovation that you will get from a monopolist will tend to be less disruptive than completely external entrant doesn't have that established fan base that it could cannibalize. So that will always act as a sort of limiting fan base and incentives. But the other point I think with cricket is we're still in a world and particularly currently where there is a threat of competition. And I think it is sports governing bodies are just waking up to what it means to competition will potentially applying in full. And whilst that threat of dynamic rivalry that threat of entry is still there, they will take greater risks and they will it's worth it to the ECB to cannibalize some of its own demand and introduce new formats if that helps to keep other entrance out. And so they will innovate to take up the space that rivals could come in and grab one of the fascinating further complexities of course with the hundred is that it's now in part I think owned by the IPL which adds to a kind of another layer of complexity. But anyway moving on from from the domestic cricket season and one thing that's clear from the recent judgements is that governing bodies are going to want to ensure their sporting rules are proportionate to their aim. So put yourself in the shoes of a governing body thinking about compliance what from your perspective with the main economic considerations that they should be taking into account when they're assessing the proportionality and so the lawfulness of their sporting rules. And I think it's a question that a lot of sports governing bodies will be grappling it will now in the wake of these recent decisions and the key question is at its heart a very simple one but I think economically or evidentially it's a very difficult one. The key question is really whether the benefits from the rule and question a material relative to their potentially restrictive effects on competition. So I think that's right for a concept but why is it so difficult to assess I think that really comes down to the need to define a proper counter factual. So when you assess proportionality you need to assess both the benefits of the rule and its effects on competition relative to the counter factual that would be in place if that rule didn't exist. So I've seen it argued that the relevant counter factual is the absence of any rule which would make the assessment more straightforward to do but I think that is very rarely a realistic scenario. So if we take these rules around player participation and rival events which we saw in the ISU. Which we see in many contexts including the PGA case that I worked on against some of your colleagues at brick court. These sort of rules restrictions around player participation and rival events they're really in demand across sports. And the reason is that you need to have some kind of rule around player participation because if you don't, then how do you ensure that players turn up at events that you've scheduled and that fans who bought tickets and sponsors who've paid to sponsor the event actually get what they've paid for? How also do you prevent against some sort of free-for-all where rival leagues can come in and poach the talent that you've invested in and you've developed? You need to have some sort of protection around it. But the problem is those protections, depending how they're formulated, can make it a lot harder for a rival league to access the essential input of player talent, which increases barrier to entry and makes it harder for them to succeed. So what I think this comes down to is, you know, is there a more competitive counterfactual that would achieve the same aim or at least most of that aim of making sure players participate and making sure that rivals can't come in and free ride on the benefits of your investment without contributing to it? Are there all turners that allow you to secure that, that don't do so in a way that the increase the barriers to entry is sort of insurmountably? So examples there could be for appearance payments as a tournament hosting an event I pay players to show up. That's arguably a less restrictive means than saying you cannot take part in a rival event. Other alternatives exist, you know, you could have similar conflicting events regulations, but say without the lifetime band that the ISU had on players who participated in a rival event. So I think the problem that fundamentally gives rise to is just in one paragraph, I've got two very different alternative counterfactuals, which I would argue are both sort of potentially capable of achieving this day-to-day in a less restrictive means. So how does a sports governing body sort of arrive at what an appropriate counterfactual looks like to assess the benefits of the rule and its potentially restrictive effects? And some of the things that we've looked at is what did the league do before that rule was introduced or what do other sports do to achieve a similar aim? But I think the reality is this is deciding what the appropriate counterfactual, what the relevant counterfactual be. This is always going to be a big judgement exercise with a lot of scope for disagreement that will keep you and I in business for some time to come. Excellent. Well, that's a very, very valuable pitch for work that we should always end a podcast with, but actually, I'm going to just round us out with one very final point, which, you know, no podcast can ever finish without talking about what Brexit means for this. And I suppose the only thing I wanted to throw into the mix before we stop is the possibility that there's going to be, or there might be a divergence between UK law and EU law on this point. And I think really, really interesting to reflect on this. I recently appeared in a sports law arbitration for a global sports governing body and we were all in that arbitration, citing from and relying on key European authorities, including those that were materially post-Brexit, we were arguing about the super lead case, I skating union, etc. Without anyone ever asking seriously at least the question whether or not these were the authorities that we should be following. But I think there is a real possibility that the UK courts take a different approach ultimately, as in many areas that were historically part of EU law, when we were part of the EU, if I can put it that way. And how that might manifest itself, if I think it's really unclear, there's nothing inherently British in the case law yet. But my guess is that if anything, UK arbitral bodies and ultimately, most importantly, because they'll be public and they can be referred to as authorities, UK courts are marginally more likely to have sympathy for mecha medina style thinking and justification and some of the solidarity arguments that Katie's been articulating for us. So I think that's my final hand grenade, as it were, for the purposes of this, which is that there may well come a point in time when we're trying to triangulate between UK law, EU law and sort of put those together in relation to these cases, which will make our lives even more complicated. Nothing left for me to do, I think, other than to say an enormous thank you to Katie Kerry from RBB for coming and participating in this podcast, but not just participating in this podcast, providing a really fascinating, eloquent, interesting, engaging articulation of these issues from an economics perspective. Thank you to anyone who's made it this far in the podcast and is still listening and that's all we have for today. Thank you.