Sports bosses on thin ice in EU antitrust probe – POLITICO.eu

Ostensibly, it’s about men in skin-tight suits racing on ice. But it has the potential to cripple the power of organizations that run many of the world’s top sports.

The European Commission is nearing the finish line in an antitrust investigation into a complaint by two Dutch speed skaters, whose governing body banned them from taking part in a lucrative and glamorous race planned for the rolling sands of Dubai.

For the skaters and other athletes who support them, the case is about having the freedom to ply their trade at a time when money is pouring into sports — and players and clubs want greater control over their own fortunes.

But the associations and federations that run many major sports warn that if their powers are diminished, commercial interests will have triumphed over sporting values and their ability to invest in the grass roots will decline. They also raise the specter of other sports going the way of boxing, with its confusing array of multiple governing bodies, all with their own titles and champions.

Big sports organizations, including the International Olympic Committee and European football’s governing body, UEFA, are keeping a close eye on the case, which is also a reminder of how even the most obscure probes by Europe’s competition agency can send shockwaves across European economies and industries.

“A precedent [could] further the erosion of international federations’ power and ‘open the market’ of sports competition organization far beyond skating,” James Ogilvie, an EU affairs consultant with expertise in global football, said via email.

“We think they go too far in stopping us from pursuing opportunities as professional athletes and working citizens in the EU” — Former Olympic champion Mark Tuitert

Across a range of sports, clubs, athletes and competitions such as football leagues are vying for greater autonomy from their governing bodies, and a bold verdict from the Commission would favor that transition, Ogilvie said.

After holding a hearing earlier this year, regulators are thought to be closing in on a final verdict, according to two people following the case, and a decision could come as soon as after the Commission’s summer break. Europe’s powerful commissioner for competition, Margrethe Vestager, has taken a personal interest in the case, telling one of the skaters on Twitter: “I will look into the matter.”

Plans on ice

Back in 2014, the niche sport of speed skating seemed to be on the cusp of a business revolution.

Icederby, a company owned by a South Korean events firm, was planning speed-skating races in the dunes of Dubai, and aimed to hold similar events in Las Vegas, Russia and Asia.

The idea, apparently, was to bring the glamour of Formula 1 to the sport.

European Commissioner for Competition Margrethe Vestager | Patrick Seeger/EPA

Investors and skaters were enthusiastic. But Ottavio Cinquanta, an Italian businessman, one-time ice skater and then-president of skating’s governing body, the International Skating Union (ISU), was not a fan.

The ISU refused to authorize the event, which it said would attract gamblers. Under its rules, any skaters who took part would face a lifelong ban from the events it controlled, including the Olympics.

In June 2014, skaters Mark Tuitert, a former Olympic champion, and Niels Kerstholt, a former world champion, complained to the European Commission.

The two Dutch skaters argued that the ISU was abusing its dominant position over skating, restricting their professional opportunities and limiting the sport’s reach. Icederby offers a top prize of $130,000 — a vast amount compared to the €2,000 a top speed-skater could aspire to win at ISU events, according to the skaters’ lawyer.

“We think they go too far in stopping us from pursuing opportunities as professional athletes and working citizens in the EU,” Tuitert told POLITICO. He complained that skaters had no say “about who is in the ISU, nor about the rules.”

“What is the role of federations and the powers they have to monopolize the sport?” he asked.

EU Athletes, a federation, has voiced its support for the skaters.

The Commission opened an investigation in the fall of 2015 — its first sporting case in well over a decade, despite numerous complaints — and formally accused the ISU of infringing antitrust rules in September 2016.

That caused a stir in the world of sports, where governing bodies thought they enjoyed a wide margin of discretion to decide what was in their sport’s best interests.

The ISU, which turned 125 years old last month, told the Commission it approves events so long as they meet its standards, including on safety and values, such as opposition to gambling. Since the complaint was filed, it has reduced the length of the ban for skaters that take part in unauthorized events.

International Olympic Committee President Thomas Bach | Fabrice Coffrini/AFP via Getty Images

Contacted by POLITICO, the ISU referred back to a statement it issued in September 2016, warning that “a neoliberal and deregulated approach to sport could destroy the Olympic values underpinning sport.”

Olympic meddling

The ISU is not the only one that is concerned.

The International Olympic Committee intervened in the case as an interested third party. Its president, Thomas Bach, used a speech in Brussels in June to warn competition regulators to stay out of sport.

“Some appear to ignore the fact that it is the sport organizations, through the grass-roots, the clubs and associations, that are investing in youth,” Bach said. “Such sport organizations cannot be compared to commercial sports businesses at the top of the pyramid, who want to cherry-pick and profit from this system for commercial interests without contributing to the spread of sport and its values.”

He called on Vestager to “to protect the European Model of Sport, rather than destroying it by applying the same rules as it does for industries, like car manufacturing or steel production.”

Some sports, such as tennis, are more flexible about the events in which their players are allowed to compete. But others, including horse riding, hockey, skiing and cricket have similar rules to speed skating that restrict the ability of competitors to take part in rival competitions, according to Ben Van Rompuy, a law professor at Leiden University who represents the ice skaters before the Commission,

There are signs that Brussels may be ready to take a greater interest in sport.

UEFA is following the case, as are commercial rivals who dream of creating an alternative league just for Europe’s super-clubs. Last year, the Financial Times reported that Chinese property giant Dalian Wanda was planning a rival to the UEFA Champions League.

A Commission spokesperson declined to comment on the status of the case.

In addition to levying fines, Europe’s competition regulators have the power to force those they find to be at fault to change their ways, whether that means redrafting contracts, selling businesses or rewriting governing rules.

The skaters want the Commission to strike down the ISU’s power to forbid athletes from taking part in events — or at least to curb that power so any decision not to authorize an event is based only on safety concerns.

The principles established in the verdict could be invoked in other sporting disputes, whether before national courts, national competition authorities or the Commission.

Indeed, there are signs that Brussels may be ready to take a greater interest in sport. An internal reorganization within the Commission’s antitrust division created a new mini-unit for sports cases.

For powerful governing bodies, the skating investigation could be just the tip of the iceberg.