Regulations on “home-grown players” could be incompatible with EU law

European Union

Regulations requiring a minimum number of home-grown players could infringe the free movement of workers

Regulations on “home-grown players” could be incompatible with EU law
April 27, 2023

On March 8, 2023, Advocate General Szpunar delivered his Opinion on a request for a preliminary ruling submitted by the Brussels Court of First Instance. According to the Advocate General, regulations requiring soccer clubs to include a minimum number of home-grown players (HGPs)—either trained by the club itself or by another club in the same national league—could be contrary to the free movement of workers and affect the competitive balance between teams.

Background: the contested provisions on HGPs

Since the 2008/2009 season, the UEFA regulation requires member clubs to include a minimum of 8 HGPs in a list of maximum 25 players. Out of those eight players, at least four must have been trained by the club in question. HGPs are defined as players who have been trained by their club or by another club in the same national league for at least three years between the ages of 15 and 21.

The Royal Belgian Football Association (“URBSFA”), a member of UEFA, applies the same rules as UEFA—except that it does not require a minimum number of players trained by the club.

In February 2020, a player from a Belgian club brought an action before the Belgian Court of Arbitration for Sport seeking a declaration that both regulations infringed article 45 TFEU on the free movement of workers. The Court of Arbitration considered that the contested provisions did not infringe the free movement of workers on the grounds that they were indistinctly applicable, that they did not give rise to any discrimination on the basis of nationality and that they were, in any event, justified by legitimate objectives and were proportionate.

Both the Belgian player and the club Royal Antwerp (which subsequently intervened in the proceedings) brought an action before the Brussels Court of First Instance for the annulment of the arbitration award. In support of their claims, they argued that those regulations restrict both the possibility for a professional football club to recruit players who do not meet the requirement of local or national roots, and the possibility for players to be recruited and fielded by a club in respect of which they cannot rely on such roots.

In view of the questions raised and the relevance of EU law for the resolution of the case, the Brussels Court of First Instance made a reference for a preliminary ruling asking the Court of Justice of the EU (CJEU) for clarification—mainly regarding the interpretation of article 45 TFEU in relation to both rules.

Development: Advocate General Szpunar’s reasoning

URBSFA and UEFA argued for the inadmissibility of the questions referred on the grounds, among others, that the dispute was purely domestic. However, Advocate General Szpunar points to its potential extraterritorial effects, since it is not inconceivable that the contested provisions may deter players from other Member States from accessing the Belgian market.

Furthermore, Advocate General Szpunar relies on consistent case-law[1] to recall that sporting activities form part of economic life—and therefore fall under the fundamental freedoms of the Treaty. This implies that professional fotball players are to be classified as “workers” for the purposes of article 45 TFUE, which also binds private entities such as UEFA and the URBSFA.

The Advocate General then argues that the contested provisions create indirect discrimination against nationals of other Member States. It is a fact that the training of players has to take place between 15 and 21 years of age—and the younger players are, the more likely they are to reside in their place of origin. In fact, the CJEU has similarly held that provisions which draw a distinction on the basis of residence are liable to operate mainly to the detriment of nationals of other Member States.

Subsequently, Advocate General Szpunar considers whether the rules in question are justified, necessary and proportionate.

As to their justification, the Advocate General highlights the particularity of entities such as UEFA, whose regulatory and economic powers may often give rise to conflicts of interest. In line with the CJEU’s case law, he considers that these entities pursue legitimate objectives rather than a public interest. This is why it is all the more important to identify this public interest among their objectives.

In this regard, UEFA and the URBSFA essentially put forward two distinct overriding reasons relating to the public interest: encouraging the training and recruitment of young players and improving the competitive balance between teams in UEFA club competitions and national competitions. As the Advocate General recalls, the CJEU has already held that, in view of the considerable social importance of sporting activities and in particular football in the European Union, the objective of encouraging the recruitment and training of young players must be accepted as legitimate. The same goes for the aim of maintaining a balance between clubs by preserving a certain degree of equality and uncertainty as to results.

In terms of proportionality, it is generally recognized that certain sporting rules are necessary to ensure competition since, in the absence of restrictions, clubs with greater resources would de facto dominate sporting leagues. In this line, the Advocate General analyzes whether the contested provisions serve the public interest reasons invoked by both entities.

Advocate General Szpunar considers that the contested provisions are suitable to attain the objective of training and recruiting young players. Nevertheless, he has doubts as to whether allowing players trained by another club in the national league encourages the training of young players. Allowing clubs to buy up to half of HGPs (since four out of eight players may have been trained by another club under UEFA rules) would thus frustrate that objective. As regards to the improvement of the competitive balance betweem teams, the Advocate General points out that while these regulations seek to oblige clubs to train their own players, the objective is frustrated to the extent that clubs can resort to HGPs from other clubs in the same league.

Therefore, the Advocate General concludes that the URBSFA regulation is not suitable in its entirety (as it allows all players to have been trained by another club), while the UEFA regulation is only partially suitable (since half of the players must have been trained by the club itself).

Finally, Advocate General Szpunar considers the necessity of the contested provisions to attain the objectives mentioned above. He acknowledges that entities bound by article 45 TFEU enjoy a certain discretion in assessing the necessity to pursue certain concerns and the relevant means to do so. However, the degree of discretion varies depending on the objective, and the CJEU has only allowed for wide discretion in sensitive matters (e.g., public health). Given the strong economic component of the objectives pursued in this case (training and improving the competitive balance), the Advocate General finds no reason to afford UEFA and the URBSFA a wider discretion than would be the norm for a Member State to justify a restriction of article 45 TFEU.

Conclusions: awaiting the ruling of the CJEU

Advocate General Szpunar’s reasoning revolves around a key point in matters of EU law and sport that seems to be at the heart of recent controversies involving private sports entities—i.e., their dual regulatory and economic function.

There is no doubt that the power of sports entities to impose mandatory rules on their members—combined with the pursuit of economic interests—creates a risk of conflict of interest that must be taken into account.

Furthermore, this Opinion focuses again on the relevance of article 165 TFEU (on the duty of EU institutions to promote sport) when assessing rules potentially restrictive of freedoms or competition. In line with the European Commission’s position in the Superleague case, the Advocate General concludes that this article constitutes a “source of inspiration” to support legitimate objectives that justify restrictions on competition and fundamental freedoms.

In any event, and in light of the conclusions reached in other cases brought before the CJEU involving sports entities (among others, Superleague or Skating Union, both reviewed in this post), one thing is clear: when analyzing these types of provisions, it is essential that their objectives should be based on transparent, non-discriminatory and objective criteria to prevent arbitrariness or unjustified restrictions.

The Opinion of Advocate General Szpunar of March 9, 2023 (C-680/21, Royal Antwerp Football Club, ECLI:EU:C:2023:188) is available here.

[1]           See, for instance, CJEU judgment of December 15, 1996, Bosman, C-415/93, EU:C:1995:463.

April 27, 2023