SFA And SPL Face Legal Problems

Last updated : 04 July 2012 By afc_1983

118241-doncaster-newcos-are-commonplace-in-englandFootball clubs in Scotland may be able to challenge whether plans to shut them out of a new league structure break competition law.

Well, that's my view anyway. And it's based on my interpretation of a recent ruling involving an English rugby side in a dispute with the Rugby Football Union (RFU).

I'm no lawyer, but for reasons I won't bore you with I recently had cause to read the judgment of the RFU appeals panel in the case of whether London Welsh Rugby Football Club should gain promotion to the English Premiership. It has been widely covered in the media since.

In the case London Welsh successfully argued that a rule of competition preventing them from being promoted - essentially that they did not have 'primacy of tenure' over the stadium in which they propose to play home matches next season - was anti-competitive under EU and UK competition laws.

So what, you may ask. Well the panel's findings were based on the fact that the primacy of tenure rule was drafted for at least partly economic reasons - to enable the league to meet its contractual obligations with broadcasters in allowing them to readily pick and choose the day and time of matches. Clubs, in essence, had to have primacy of tenure at stadiums so they could flexibly comply with the weird and wonderful kick-off times that league bodies and TV companies prescribe.

Other existing Premiership clubs though did not have to comply with the rule - they were exempt - and so the appeals panel essentially ruled that it was unjustifiable to prevent London Welsh from going up.

What you may not know is that sports governing bodies do have a right to create rules that are, by their nature, anti-competitive. However, such rules can only be justified for sporting reasons - in the London Welsh case the RFU had claimed that the 'primacy of tenure' rules were aimed at ensuring league fixtures could be organised, ensuring further benefits for the sport and fans. It said any commercial gains around the rule being used to meet broadcasting commitments also served a legitimate sporting reason too since those broadcast deals indirectly benefited the sport of rugby through commercial investment in the sport.

What has this got to do with Scottish football then?

Well, it has been reported that some clubs have threatened to form an SPL2 and exclude clubs from entering if they fail to vote Rangers newco straight into Division One. They are worried about the commercial pressures they face without cash generated through association with Rangers, whether from TV deals or money through the turnstiles.

As the London Welsh case has shown though, only genuine sporting reasons can be relied upon as a legitimate reason for bending competition law.

As way of reference, competition law in the UK generally prohibits any "agreements between undertakings, decisions by associations of undertakings or concerted practices which — (a) may affect trade within the United Kingdom, and (b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom".

The rules around newcos in Scottish football are clear. SFL clubs should not be pressured into voting in favour of newco Rangers being parachuted into Div One because of threats of restrictive agreements being forged behind the scenes. The analogy of London Welsh's case shows that anti-competitive agreements in sport can be challenged and defeated, especially ones built purely on economic interests, and bully-boy authorities and clubs should be mindful of imposing those kind of restrictions as a result.

afc_1983