3. The Bosman ruling clarifies the law for football professionals in the EU. Analyse the decision highlighting any outstanding matters.
• Union royale belge des societes de football association ASBL v Jean-Marc Bosman, Royal club liegeois SA v Jean-Marc Bosman and others and Union des associations europeennes de football (UEFA); v Jean-Marc Bosman.  EUECJ C-415/93 (15 December 1995) (Case C-340/90)
This paper analyses the famous ruling in C-415/93 URBSFA v Jean-Marc Bosman and its impact on professional football in the European Union. For a long time the bodies that govern professional sport in Europe considered themselves either immune from the effects of EU free market and competition law or in some sense a ‘special case' . However, this was a misguided opinion and very far from the truth . Realisation finally dawned that professional sport is an economic activity subject to regulation at a European level just like any other business in the immediate aftermath of the European Court of Justice decision in Bosman and the shockwaves of the decision still ripple over the business of professional football today.
The origins of the Bosman case
Jean-Marc Bosman was a Belgian professional footballer of reasonable but not outstanding skill. On the pitch his efforts were relatively unremarkable but his name is now written into the annals of football history as a consequence of his endeavours at law. In 1990 Bosman sought a transfer from RC Liège , a Belgian club to Dunkerque, a French club. However, his move fell through due to UEFA regulations and he was effectively left in a state of limbo, given that he had been suspended by his old club RC Liège and barred from playing for another club, including Dunkerque. Therefore Bosman decided to sue RC Liège, URBSFA and UEFA for financial compensation. More significantly perhaps, a declaration was sought that the relevant UEFA and URBSFA regulations concerning player transfers and foreign player participation were in contravention of the applicable European Community laws.
Confronted by a question of EC law the Cour d'Appel in Liège referred the case to the European Court utilising the Article 234 preliminary reference procedure (at the time of Bosman this was found in Art 177EC) of the Treaty of Rome . The Cour d'Appel asked whether Articles 48, 85 and 86 of the EC Treaty (now Articles 39, 81 and 82 EC respectively) should be interpreted as:
“(i) prohibiting a football club from requiring and receiving payment of a sum of money upon the engagement of one of its players who has come to the end of his contract by a new employing club;
(ii) prohibiting the national and international sporting associations or federations from including in their respective regulations provisions restricting access of foreign players from the EC to the competitions which they organise?”
The resolution of the Bosman case: challenging the transfer system on the basis of Article 39EC
As UEFA lawyers should have been well aware, in C13/76 Donà v Mantero the European Court of Justice had long-since ruled in unequivocal terms that EC law must be applied with full scope and force to the regulation of professional sport if the practice of that sport constitutes an “economic activity”. The case also clarified that EC law applies to private sporting associations. Donà v Mantero sees its origins in C36/74 Walrave and Koch v Association Union Cycliste Internationale  in which the Court of Justice declared as follows:
“having regard to the objectives of the Community, the practice of sport is subject to Community law…in so far as it constitutes an economic activity within the meaning of Article 2 of the Treaty”.
Outwith the narrow sphere of sport, another judgment, R v HM Treasury and Commissioners of Inland Revenue  laid down jurisprudence that came to underpin the Bosman decision. This ruling clarified that the freedom of establishment principle set down in the Treaty of Rome would be ineffectual if the Member State from which an individual sought to move of could by hinder, by the imposition of rules, his establishment in another Member State. The R v HM Treasury and Commissioners of Inland Revenue principle was endorsed and applied in the Bosman decision and the Court of Justice wasted little time in finding that the transfer fee regulations of the professional game had served to impede Bosman's right to free movement as a ‘worker', which is the mundane classification of the professional footballer at EC law. When one strips away the language and special context of professional football, in simple terms Bosman had merely sought to move from one member state to a different member state for the purposes of work and he had been stopped from doing so by regulations that ran contrary to the Treaty of Rome. The Court held that out-of-contract transfer fees inevitably restricted free movement around the Community, because a new club is far less likely to sign a new player (or employ a new worker) if it is required to pay a transfer fee which might amount to millions of Euros for the privilege of so doing.
Analysis of the arguments raised by UEFA
UEFA sought to argue that the football transfer rules were justified because they had been established consonant with legitimate aims laid down in the Treaty of Rome and that they were proportionate to securing those goals and in the alternative, inspired by C-55/94 Gebhard , that the rules were justified on compelling public interest grounds. It was further asserted that the transfer fee system contributed to the financial and competitive equilibrium between clubs in the professional game and that it both encouraged and facilitated the cultivation of young players by providing additional funds for youth talent development programmes. Moreover, UEFA submitted that the transfer fee system represented no more than a system for compensating for past investment in the development and training of the player under transfer.
It is easy to see that these defences are mutually contradictory. A system cannot both represent merely compensation for money spent and a source of funding for youth development. All the arguments raised by UEFA were flatly rejected, both by Advocate General Lenz, who delivered his opinion on the case a few months before the final ruling, and by the European Court itself. Transfer fees payable by clubs, routinely running into millions of Euros, were entirely out of proportion to any actual ‘costs' of training and development, which in any event clubs ordinarily invest in their players to improve their performance for that club on a weekly basis. Compensation for ordinary training practices was thus deemed inappropriate notwithstanding the massively disproportionate fees charged. Additionally, transfer fees were not calculated on the basis of training costs but with regards to factors wholly unconnected with that expenditure. For example, as Advocate General Lenz noted in his Opinion in Bosman (para 237) in the German DFB League, the transfer of an amateur player would cost a first division club DM100,000, but a second division club was required to pay only DM45,000. Spink makes the point succinctly:
“The notional argument based on compensation for training attracted little support. A great many employers invest heavily in training their staff. Football was not deemed justified in considering itself a special case.”
It is submitted that none of the arguments raised by UEFA were tenable given the fundamental rights and freedoms with which the transfer fee regulations interfered. Indeed it is common knowledge that the European Court had been ‘champing at the bit' to get a chance to rule on the regulation of professional football for years before the Bosman litigation arose, because it was seen as a very high profile and obvious contravention of basic EC legal principle. Years before Bosman, the often-cited Janssen Van Raay Report to the European Parliament in 1989 had denounced the transfer system of professional football as:
“a latter-day version of the slave trade, a violation of the freedom of contract and of the freedom of movement guaranteed by the Treaties.”
In part this explains (if not fully justifies) the European Court's uncharacteristic enthusiasm to deal with the question of the 3+2 rule of European football (which was not strictly necessary for the resolution of Bosman's case and thus would ordinarily have been left unanswered. The following section of this paper deals with this issue.
Bosman and the 3+2 foreigner rule of European football
As has been observed, the Court of Justice could have provided Bosman with a means of redress without reference to the 3+2 rule, which stipulated that clubs were permitted to field a maximum of only three foreign players, and a further two so-called ‘assimilated' players in European club competitions. A player qualified as ‘assimilated' if he had lived in the country in question for five years or had played in that club's youth team. In C428/93 Monin Automobiles the Court had suggested that any questions referred to it must be ‘objectively required' by the national court to enable that court to give judgment and a large number of cases had seen the Court refuse to answer questions that it considered irrelevant to the dispute at issue: see inter alia C18/93 Corsica Ferries Italia Srl v Corpo dei Piloti del Porto di Genova and C343/90 Dias v Director da Alfândega do Porto (also note the principles laid down in C244/80 Foglia v Novello (No.2) ). As stated above, the Court chose to ignore this line of authority because, it is suggested, it was keen to bring UEFA to book for what it perceived to be a rule that flew in the face of fundamental EC Single Market principle.
The 3+2 rule manifestly contravened the Treaty of Rome. One does not have to be a lawyer to work out that if a Spanish club is already fielding 3 German players and an Italian player seeks to transfer to the club, the Italian player's freedom of movement is impeded by a rule stipulating that the Spanish club already has its full quota of foreigners. This is precisely what the Court of Justice found, buttressing its conclusion not only with core Treaty principles and long-established free movement case law, but also with Regulation 1612/68, which provides expansion on Article 39EC, in Article 4 by stating that rules:
“which restrict by number or percentage the employment of foreign nationals in any undertaking, branch of activity or region, or at national level, shall not apply to nationals of other Member States.”
The football purist may well regret this ramification of the Bosman ruling. It is true that the local and even the national identity of many clubs has been diluted if not extinguished by the fact that post-Bosman it is not unusual to find clubs that routinely field a full team of foreign players. This may impact both on the loyalty and commitment of supporters and of the players themselves. It may also weaken national teams because the best teams chose to fill their squads with proven foreign stars rather than up-and-coming domestic talent. However none of these concerns constitute arguments necessary to convince the European Court to derogate from the fundamental Treaty right of free movement.
In the aftermath of Bosman, C51/96 Deliège offered what seemed to be a crumb of comfort to those wishing to reassert the previous status quo in football, notwithstanding the fact the Deliège concerned the international organisation of judo competition rather than professional football itself. Deliège saw the Court acquiesce in the face of certain nationality requirement for entry into competition. However, it is argued that Deliège can be distinguished from Bosman, given that the selection rules that were contested in Deliège did not endeavour to restrict free access to the labour market per se, but rather merely to specific judo competitions.
Further analysis of the Bosman ruling and outstanding issues
One issue that remained outstanding after Bosman was how non-EU footballers should be treated. In C438/00 Kolpak the European Court took steps to end this uncertainty by extended portions of the Bosman ruling to non-EU workers who are covered by third party association agreements (with states outside the EU). The Court found that many of these agreements provide professional sportsmen and women employed by a club based in an EU Member State with a right to equal treatment with EU nationals in terms of remuneration, working conditions and dismissal. This has the effect of providing such workers with protection under the non-discrimination on grounds of nationality stipulations laid down by Bosman.
Another issue left outstanding after Bosman is the question as to whether EU competition laws could or should have been employed to regulate professional football. The Court of Justice chose to concentrate on dealing with the matter under the principles of free movement, but it is submitted that the competition rules now laid down in Articles 81 and 82 EC (at the time of Bosman these provisions were in Articles 85 and 86 EC) could have been applied with equal force and effect to resolve the case. This was certainly the view reached by Advocate General Lenz in his lengthy and well-argued Opinion on Bosman . Spink observed in 1996 that:
“Article 85 [now Article 81 EC] of the Treaty, which prohibits anti- competitive agreements and decisions by associations of undertakings (including football associations), may prove to be the sword of Damocles hanging over the domestic fee.”
The common law doctrine of restraint of trade, which can be traced in this context through cases including Nagle v Fielden (1966) , Grieg v Insole (1978) and Newport AFC v FA of Wales Ltd (1994) , combines with the EC competition law framework to present a formidable weapon against the purely domestic transfer fee in circumstances where free movement issues are redundant because no cross-border traffic is contemplated. This is now reinforced by the Competition Act 1998, which mirrors the EC competition regime. It was noted in the press that just a few weeks after the Bosman decision was delivered the EC Competition Commissioner gave notice to the English Premier League that its domestic transfer fee system was operating in flagrant contravention of what is now Article 81 EC .
The leading case of C519/04 Meca-Medina and Majcen v Commission has addressed many of the questions left unresolved or ambiguous by Bosman. It is argued that Meca-Medina clearly endorses the application of both the free movement and competition regimes of EC law to professional sport, and confirms that even where free movement principles are not offended the competition rules may well strike a sporting regulation down.
In Meca-Medina the European Court ruled:
“it is apparent that the mere fact that a rule is purely sporting in nature does not have the effect of removing from the scope of the Treaty the person engaging in the activity governed by that rule or the body which has laid it down.”
Furthermore, Meca-Medina gave no quarter to sporting bodies, stipulating that even sporting rules with a marginal, indirect or peripheral economic effect would be held subject to the full force of EC free movement and competition principles. This represents a confident advance on the foundations laid by Bosman.
With reference to the title to this paper, it is certainly true that the Bosman judgment clarified aspects of the law relating to professional footballers and their freedom of movement with the EU. Prior to Bosman, the clubs held all the cards, post-Bosman players have a huge amount of power and freedom in the marketplace. This shift in the balance of power occurred largely as a consequence of the successful challenge to the transfer system in Bosman, and the striking down of the 3+2 rule allowed players to exploit their new found freedom more effectively than previously would have been possible. The multi-millionaire stars of football today, especially those with a tendency to move from club to club, have much to thank Jean-Marc Bosman for. Whether professional football is a better quality product, in either sporting or commercial terms, as a result of Bosman is debatable, but it is at least in closer alignment with EU law than it was in the early 1990s.
Cases as footnoted to standard citation
Consolidated Version of the Treaty Establishing the European Community, Official Journal of the European Union, C321 E/37 (29.12.06)
Craig P. and De Burca G., EU Law: Text Cases and Materials (2007), Oxford University Press
Farrel, R., ‘Bosman Opinion - What does it mean?' (1995) 3 Sport and the Law Journal 17
Foster, N., Blackstone's EC Legislation 2008-2009, (2008) Oxford University Press
Gardiner S. et al., Sports Law, (2005) Routledge Cavendish
Janssen Van Raay, Report of the Committee on Legal Affairs and Citizens' Rights on the Freedom of Movement of Professional Footballers in the Community, European Parliament, Session Documents Series A, 1 March 1989
Moorhouse H.F. et al, Time for a New Approach: The International Player Transfer System (A FIFPRO Report to the European Commission, 9 February 2001)
Morris P., Morrow S. and Spink P., ‘EC Law and Professional Football: Bosman and its Implications', Modern Law Review (1996) 59:6 pp893-902
Morris P., Morrow S. and Spink P., The New Transfer Fee System in Professional Soccer: An Interdisciplinary Study,  Vol 5 Issue 4, Contemporary Issues in Law, 253.
Spink P., ‘Post-Bosman Legal Issues', Journal of the Law Society of Scotland, March 1997 Vol 42 No 3, p108-110
Spink, P., ‘The Bosman Case: Implications for Professional Football in Europe and at Home', Journal of the Law Society of Scotland, February 1996, Vol 41 No 2 pp71-74
Weatherill S., ‘Do sporting associations make law or are they merely subject to it?', (1998) 9 European Business Law Review 217.