May 25, 2011
Can American Soccer Fans Bring Antitrust Claims Against European Football For Financial Fair Play?
Posted by David Zaring

European football is about to institute a weak salary cap on teams, requiring them to limit player wages and other costs to a percentage of turnover.  Not exactly pro-competition, it seems to illustrate the differences between European and American business cultures, in that everyone over there, the players, the liberal newspapers, the fans, and of course the owners, are breathing a sigh of hopeful relief.

Over here, if the, say, investment banks got together and agreed to limit compensation to a percentage of turnover, I suspect you'd see an antitrust class action toots sweet.

There are Americans who pay to see European football games on various cable networks.  Can they get rich suing for treble damages as the end users of a sport fixing costs?

I'm not the ideal person to answer such a question - I leave antitrust to the antitrust lawyers if I think there might be a problem.  But I do think there might be at least an issue here.  Here's some ballparking of some salient issues:

  • Can US law reach conduct that occurs abroad, with foreign owned and foreign traded firms?  NAB v. Morrison appeared to change the long presumption in favor of extraterritorial application of the antitrust laws into something less clear (it was, to be sure, a securities law case, and antitrust appears to have a better statutory language case).  But many of the firms affected by financial fair play, AS Roma, Liverpool, Manchester United, Aston Villa, Sunderland, &c, are owned by American principals.  And if the conspiring firms are selling their products into the American marketplace, intentionally, it would ordinarily pass that test.
  • Are salary caps illegal, given that the NFL and NBA have them?  Sports are different, to be sure. And the question in antitrust is always whether the consumer is harmed by the collusion.  Fixing player costs might not harm the consumer, if that consumer is an American TV viewer.  But in the US, part of the reason salary caps are okay is because they occur in the context of collective bargaining with a union.  That's why the NFLPA decertified, to sue the NFL on antitrust grounds.  There isn't a European players' association cognate.
  • So I think there are antitrust and European competition law issues to think about here.  The European Champions League final is on Saturday at 2:00, and it will be broadcast live on Fox.  I'd be interested in knowing which law firm UEFA hired to advise it on American antitrust compliance. 

But possibly I'm missing something obvious, and if there's a post on this, my very brief internet search didn't find it.  We'll check in with Michael McCann and see if he has thought about adding extraterritoriality to his already busy sports antitrust oeuvre. 

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