Friday, March 06, 2009

Salary and player restrictions: new balls please

 Salary caps and restrictions on player transfers have been in the news a lot recently. Michel Platini has said he is keen to limit the amount that clubs can spend on player transfers and wages, and FIFA has sent a report stating that its ‘6+5’ proposal is compliant with European law to the European Commission for analysis – the report will be one of the main topics of discussion at a 17 March meeting between the Commission and European Sports Ministers, as World Sports Law Report unveiled earlier this month.

The underlying principle behind these moves concerns protecting the integrity of sport. In any other business, you work towards the goal of eliminating competitors, however sport doesn’t work like that. Despite what Arsenal fans might tell you, a football fan doesn’t want to watch his team win every game in every season for evermore. Competitors must put up some sort of a fight for sport to remain interesting, or for fans to keep paying to watch it. Sport rightly argues that its circumstances are unique, which forms the basis of its argument that it should be afforded certain exemptions from European law to allow it to preserve that competitive element.

However, football is also unique from other sports. A salary cap is able to operate in US sports effectively because it is a closed market – other countries do not (yet) offer any meaningful competition in American football, basketball and baseball. A salary cap is also able to operate in both rugby codes because countries that play both codes have similar economic status (this is a simplistic analysis – there is an argument that south sea island nations have suffered poaching of players for many years and the salary cap does not prevent this).

As football operates in a variety of economic markets and the wealth of clubs varies dramatically, a salary cap would need to be global and would be difficult to enforce. Likewise, it is unproven as to whether the ‘6+5’ proposal will effectively encourage players to develop their own talent, as the ‘6’ refers to players qualified to play for the national team in the country in which the club is based (if you are over 18 and have been living in the UK for the last five years – or three years if you are married to a Brit – you qualify as a ‘British Citizen’. This principle allowed Lesley Vainikolo to play for England at rugby union, even though he was born in Tonga). The ‘6+5’ proposal also does not include substitutes, which would allow clubs to replace three of the six ‘qualified’ players shortly after the final whistle anyway.

As football is unique, it needs unique methods to reinforce the integrity of the game. As both the ‘6+5’ proposal and the salary cap are based around the same principle – that something must be done to encourage clubs to invest in youth and to limit club spending on wages in order to reinforce the competitive balance in football – then why not tackle both at once?

If sport does have the autonomy to make its own rules, as FIFA claims, then FIFA should grasp the nettle and come up with a bold rule. Why not limit player wages during the first two years of a professional contract (for example, to €400,000 per year) when playing for the starting 11 of a club? That would encourage clubs to develop their own players at a younger age and bring them through the system, rather than sign new players on extortionate wages. Player transfers could still operate, as long as players were prepared to accept a pay cut in order to move clubs. It would also encourage player loyalty in the eyes of the fan, as players would not be able to chase ever-higher wages and would be rewarded for loyalty, as they could be paid whatever amount their club deems fit following two years of service. It would also have less of an effect on smaller clubs than any salary cap based on a percentage of revenue.

While there are no doubt faults with this system, I think it has as much - if not more - merit than any of the proposals designed to protect the integrity of football put forward so far.

Andy Brown

Wednesday, February 11, 2009

Opinion: The negotiating aspects of sports mediation

Sport continues to be big business - it is worth more than 3% of world trade and more than 2% of the combined GNP of the 27 Member States of the European Union - despite the so-called 'credit crunch', which has had little impact as far as the world's most popular and lucrative sport of football is concerned. For example, recently a transfer deal of £100 million and a weekly salary of £500,000 were mooted in respect of the AC Milan midfielder Kaka. So, there is much to play for both on and off the field. Where substantial sums of money are in play, sports disputes are never far behind and are on the increase too. This, in turn, raises the question of how best to resolve them. By traditional means - through litigation in the courts - or modern ones, such as alternative dispute resolution (ADR) processes.
ADR takes many forms and a popular one that is proving very successful for settling sports-related disputes - especially commercial and financial ones - fairly, quickly, inexpensively and effectively is Mediation. However, Mediation is not appropriate in all cases, particularly where injunctive relief is concerned and also in the case of doping, which can never be mediated. However, any financial consequences of doping offences do lend themselves to settlement through Mediation.
Mediation is essentially an assisted negotiation conducted through the medium of an independent mediator or facilitator, whose role is to facilitate the negotiation process and assist the parties to reach an amicable settlement of their dispute. The success of Mediation not only depends on the willingness of the parties in dispute to enter into negotiations, but also on the skills of the mediator, who requires not only an appreciation of the negotiation process, but also negotiation skills.
In order to appreciate how to mediate successfully, it is necessary to understand the process and dynamics of negotiating. So, in this article, we will take a look at the general principles of negotiating, which, although not a science, is certainly an art.

Negotiating guidelines
There are a number of useful guidelines to be followed in order to achieve a successful outcome in any negotiations and these general principles apply whatever the nature of the dispute.
In basic terms, negotiating is 'getting to yes'. Like any other form of advocacy - persuading another person to accept your point of view - a negotiation needs to be carefully planned. Before you start, you need to know clearly what your objectives are and how you are going to achieve them. Make sure, however, that your objectives are realistic and reasonably achievable.
An important part of the planning process is to gather as much intelligence about the other side in the negotiation as possible. You will need to know, amongst other things, the kind of people you are dealing with; their strengths and weaknesses; and their aims and objectives.
Again, as part of the planning process, the negotiation needs to be structured into distinct phases. The first phase should identify any points of agreement to get those out of the way; the next, any points of disagreement and the reasons for them. The following phases should be to evaluate - from your own point of view and that of the other side - the importance of these differences and the possibilities for any compromises. Try to identify the matters that are negotiable and the ones that are not negotiable. The points that can be conceded and 'given away' and the ones that cannot - the ones that are 'deal breakers' if not agreed.
Watch out for and try to interpret any 'body language' - that is, non-verbal communications and gestures. This is very important in multi-cultural negotiations. Negotiation also needs time and patience and should not, therefore, be rushed, otherwise bad deals may result.
Every negotiation should be conducted in a courteous and conciliatory manner. When tempers and blood pressures begin to rise, it is time to take a break.
The use of 'role play' - the 'hard' person and the 'soft' one - should be handled carefully. You should decide, in advance, on the particular roles to be played by each of the members of your negotiating team. In particular, you should appoint one of the members of the team to lead the negotiations and someone else to take notes and keep a record of everything that is said and 'agreed' during them. As to the composition of your negotiating team, if the issues raised involve technical, legal and/or financial matters, make sure that there is someone who is qualified and, therefore, can deal with them.
Likewise the imposition of any deadlines, which are designed to move the negotiation along and reach a conclusion more speedily, should also be carefully managed. As in litigation, so also in good negotiation, you should never issue a threat that you are not able and have no intention whatever of carrying out!
Timing is also very important. Choose your moment carefully to press home a particular point. Always know when and how to retreat.
In international negotiations, be aware of and allow for cultural differences and the need, where necessary, for the other side to 'save face'. This is especially important in negotiations with the Chinese and Japanese and also with parties from the Middle East, where pride may be at the heart of the matter or dispute.
Always remember that negotiating is 'getting to yes', and so always try to make it easy for the other side to say 'yes'.

Concluding remarks
You should be aware of all these negotiating techniques not only to use them effectively in your own interests, but also to be aware of any of them when they are being used against you!
In addition to all the other points that I have mentioned, there is one vital or 'golden rule' that should always apply to any negotiation and it is this: Do not insist on getting the last penny!
Also, it is always worth remembering: in a successful negotiation, everybody wins something.

Ian Blackshaw

International Sports Lawyer

Wednesday, February 04, 2009

WSLR Breaks News of WADA Whereabouts Challenge

 World Sports Law Report’s January edition broke news of a legal challenge to the World Anti-Doping Agency’s whereabouts requirements under the World Anti-Doping Code, which requires athletes to state where they will be for one hour each day for out-of-competition testing. The legal challenge, which was launched by Belgian players’ association ACV-Sporta, is being supported by the international association for football players’ associations, FIFPro.

The story received coverage in the Guardian on 22 January and on the BBC on 22 January, however subscribers to World Sports Law Report's e-law alerts, which are free of charge, were informed on 20 January, despite later claims that the story was broken elsewhere (I suppose I should be used to this after 10 years of trade journalism…). The first person two correctly guess which two news organisations also receive the e-law alerts will receive £100 off the cost of a World Sports Law Report subscription! To send your answer, please click on my name below.

Andy Brown

Wednesday, January 28, 2009

177 Sites Illegally Streaming Premier League Football

 The FA Premier League (FAPL) has revealed that during the 2007/8 season, it identified 177 different sites ‘which contained or were connected to unauthorised streaming of Premier League football matches’. The FAPL made its announcement in response to the UK Government’s Department for Business, Enterprise & Regulatory Reform’s consultation on peer-to-peer (p2p) file sharing. The FAPL said that of those sites, 122 (63%) used p2p technology to distribute the content.

The figures illustrate what a tough job the FAPL faces in policing illegal content, and in retaining the value of its rights deal when it comes to renegotiate its rights package for 2010-2013. The value of the FAPL rights deals have continued to rise due to the exclusivity that it creates for its rights holders. If that exclusivity disappears, then the value of those rights could fall, and p2p streaming adds a third threat to the exclusivity of those rights.

The first threat concerns whether decoders can be used to watch matches broadcast by legitimate broadcasters in other Member States. The High Court is currently waiting for a ruling on this from the European Court of Justice. The second threat involves Ofcom’s continuing consultation into the pay-TV market in the UK, which could force BSkyB to allow other broadcasters to screen FAPL football. These potential pitfalls are examined in detail in the January edition of World Sports Law Report.

Andy Brown