UK Anti-Doping (UKAD) is the national anti-doping association in the UK and is responsible for producing regulations (UKAD Regulations) that comply with the World Anti-Doping Code (WADA Code) and implementing those at national level.
The UKAD Regulations often serve as a template for sports governing bodies in the UK to adopt for their particular sport. Many simply adopt them entirely whilst higher profile sports such as football or cricket amend them, in consultation with UKAD, for their own specific needs.
Participants in any sport will be required to comply with both UKAD Regulations and those produced by their own sport. UKAD is also responsible for carrying out testing, managing results and presenting cases regarding many of the alleged breaches within UK sport.
A new version of the WADA Code came into force on 1 January 2021, meaning that all sports have been required to review and update their own rules to ensure compliance.
One of the changes is the approach to recreational substances (eg, cannabis and cocaine) where significantly lower sanctions are now possible if the athlete can demonstrate the usage was recreational and out-of-competition. Athletes with an existing sanction for recreational substances may be entitled to a review.
Doping is not a criminal offence in the UK. However, certain substances that appear on the prohibited lists are criminalised, such as cocaine.
Integrity is a broad concept within UK sport. Anti-doping and anti-corruption issues (such as match-fixing) are high-profile but the concept also captures governance (see further 4.2 Corporate Governance), safeguarding, athlete welfare, disciplinary issues and social media.
Sports governing bodies should now be proactive in dealing with their integrity issues. To take match-fixing as an example, we would expect:
Depending on the specific facts, integrity rule infringements can also constitute criminal offences, such as fraud, as was the case when a number of Pakistani cricket players were given prison sentences ranging from six to 32 months for spot-fixing during a test match played in England. In such circumstances, sports governing bodies need to liaise with the criminal authorities to ensure neither set of proceedings are prejudiced.
Certain integrity offences are captured under UK law (such as the Fraud Act 2006 or the Bribery Act 2010). However, prosecution relies on law enforcement having the resources and interest to investigate and this is not always the case, particularly if there is an international element.
Sports Governing Bodies
Whilst it is not illegal, sports governing bodies in the UK are mindful of the potential conflicts of interest if a participant is known to be betting on their own sport. It raises suspicion that the participant has some kind of inside information regarding the outcome of the event in question or, worse, could influence a result.
Whether or not that is the case, sports governing bodies wish to avoid any suggestion of a lack of integrity in their sport. As a result, a sport’s regulations will often prohibit participants from betting on their own sport, usually on a very broad level, and are subject to sanction in the event of betting breaches.
The Gambling Act 2005 requires information sharing between sports governing bodies and betting operators and other stakeholders in the gambling industry. In addition, specific information sharing arrangements are often put in place to allow governing bodies to be aware of, and respond swiftly to, any concerning betting. The UK government has announced a formal review of the Gambling Act 2005.
Despite the longstanding regulation, participants are still regularly sanctioned for betting-related offences – for example, footballer Daniel Sturridge received a four-month playing ban and a GBP150,000 fine for passing on confidential information regarding a potential transfer.
There is increasing scrutiny as to the appropriateness of betting operators sponsoring professional clubs or events – currently an important stream of revenue for sports in the UK (see further 2 Commercial Rights).
Sports governing bodies in the UK will provide for disciplinary proceedings as part of their regulations where an athlete is alleged to have committed an anti-doping, betting or other integrity offences as well as on-field offences.
The athlete provides their contractual agreement to any relevant regulations as a condition of their participation in the sport. Employment contracts with clubs (see 7 Employment) will also require adherence to the regulations.
These disciplinary proceedings will tend to be before tribunals or judicial bodies that are administered internally by sports governing bodies, albeit that the judges should be independent of the governing body (for example, the FA’s Regulatory Commission).
Smaller organisations may elect to provide for external independent tribunals such as Sport Resolutions to both administer their proceedings and provide the judges.
There is a distinction between disciplinary proceedings related to on-field offences and off-field offences in the UK, as follows:
Aside from sponsorship and broadcasting rights (see further 2.2 Sponsorship and 2.3 Broadcasting) and exploitation of data rights (see further 5.5 Sports Data), there are a number of other commercial rights across the sports landscape in the UK, including merchandising, ticketing and hospitality and “official supplier” rights (where the sponsor becomes the official supplier of a product or sponsor to the team or club).
Rights-holders, such as sports teams and event organisers, often seek to exploit the goodwill in their brand by selling branded merchandise. To do this, rights-holders typically enter into licensing arrangements, pursuant to which a licensee (or sub-licensee) is granted the right to design, manufacture and sell a specific range of products that incorporate the rights-holder’s intellectual property in exchange for paying the rights-holder a licence fee and royalty of the licensee’s sales.
The ability to sell tickets to an event remains a cornerstone of the potential revenues for sports rights-holders in the UK. With COVID-19 currently preventing fans from attending live sporting fixtures (see 9.1 Continued Disruption), loss of ticket income has been felt most keenly by teams and sports that do not benefit from significant broadcasting income and thus are reliant on ticketing income to sustain their day-to-day operations.
Secondary Ticketing Platforms
Where ticket-holders are able to resell tickets to an event, the Consumer Rights Act 2015 provides that online secondary ticket platforms must provide the buyer of the resold ticket(s) with the information on the seat they are purchasing.
If these tickets are resold without the consent of the relevant organiser of the event, the available information on the platform enables the event organiser to identify the original purchaser and, in turn, this assists them in bringing claims against such offenders.
Recent legislation bans the use of automated software by ticket touts to purchase a number of tickets in excess of the permitted number.
Hospitality can also provide a substantial source of income to sport venue owners in the UK. Significant hospitality offerings (including fine dining, tickets and player meet-and-greets) are now built into stadia and on land controlled by sports rights-holders wresting much of this income from unofficial providers. By way of example, Tottenham Hotspur FC’s new stadium was designed and built with tailored luxury hospitality facilities, various hospitality lounges and approximately 8,000 of the 62,850 seats in the stadium being premium hospitality seats.
Brand Association with Sport
Sport has an emotional and commercial appeal that companies frequently look to leverage to promote their own brand. Rights-holders in the UK are aware of the potential value that their association brings and are increasingly sophisticated about the way they target potential sponsors, either directly or by using a specialist agency.
Depending on the nature of the rights-holder, its assets and number of interested sponsors, it may be able to sell different sponsorship packages relating to specific competitions or events, specific territories or simply different levels of rights and access. In recent years, the use of data has become increasingly important to the valuation and activation of sports sponsorships in the UK.
Key Contractual Terms
Aside from a clear articulation of the sponsorship rights being granted, some of the key terms in a typical sponsorship contract include:
Given the difficulties posed by the COVID-19 pandemic, rights-holders and sponsors alike are paying more attention than ever to what contractual provisions should apply if sponsorship rights are not delivered.
Traditional Sport Broadcasters
Broadcasting rights have become arguably the most important set of commercial rights within UK sport over the last 20 years. For TV companies such as Sky, BT and ITV, live sport remains one of the few types of content that has bucked the trend of declining viewing figures in recent years. As such, sport is often the cornerstone of their lucrative subscription packages and helps to drive significant advertising revenues.
In return, sports rights-holders have benefited from exponential growth in the value of their broadcast rights. For example, the domestic broadcast revenues earned by the FA Premier League have risen from GBP191 million earned during the 1992–93 to 1996–97 period to approximately GBP5 billion due to be paid in the shorter 2019–20 to 2021–22 period, albeit the most recent domestic rights cycle resulted in a small decrease in revenues. This exceptional rise in value has made it very difficult for terrestrial broadcasters to compete. However, the Broadcasting Act 1996 still requires certain “crown jewel” events, considered integral to British culture (eg, Wimbledon), to be shown on terrestrial TV. This legislation has a depressing effect on rights values given only terrestrial broadcasters can bid.
Non-traditional Sport Broadcasters
Digital companies and content platforms such as Amazon, YouTube and Facebook are also increasingly active in the sports broadcasting space, whether through live rights, highlights and/or associated entertainment content such as documentaries. They have different motivations and commercial models to the traditional pay-TV broadcasters, which impacts the type of rights they acquire and the price at which they do so.
In relation to the contractual arrangements between rights-holders and broadcasters, the relevant sporting league or event organiser typically grants a licence to the broadcaster(s) to access the relevant venue (and thereby create the broadcast).
Ownership of the copyright in the images of the broadcast itself will automatically vest in the producer/director of the footage under the Copyright, Designs and Patents Act 1988 and so the relevant contract usually assigns such copyright to the sport event organiser, which licenses it back to the broadcaster so that it may be broadcast in a specific territory.
Hosting, Attendance and Participation
Presently, there exists no proprietary rights in a sports event in the UK. Instead, sports events are primarily protected by the commercial contracts that control the various rights attached to the event and the access to the relevant venue.
For example, the organisers of sports events may enter hosting or participation agreements with venues, teams and athletes and issue tickets to spectators that include specific restrictions (eg, to limit sharing of footage from the event and re-selling their tickets to third parties). See also “ticketing” in 2.1 Available Sports-Related Rights.
Structure and Organisation
The structure of sports events will depend on the governance of the specific sport. In UK sports, the national governing body of the relevant sport will often be the organiser of competitions within that sport – where this is the case, the relationship between athletes/sports clubs and the governing body will be regulated through the governing body’s rulebook or participation agreement.
In instances in which the competition organiser is not the governing body (eg, the Premier League in English football), a shareholder model can be used to enable the competition’s participants to take decisions collectively in relation to the competition’s rules, commercial arrangements and so on.
Duty of Care
In the UK, event organisers owe a duty of care to take reasonable steps to prevent injuries to people at its event and provide access to proper medical equipment and treatment should they become injured. Should this duty of care be breached, event organisers may be liable on the grounds of negligence. Two primary pieces of legislation that deal with the applicable civil liability of event organisers in the UK are the Occupiers’ Liability Acts 1957 and 1984.
It is rare for athletes themselves to be deemed liable to spectators (since spectators are generally treated as having consented to being at risk of reasonably foreseeable events).
Legislation has been introduced to increase the safety of sporting events and reduce the risk of public disorder – for example, the Criminal Justice and Public Order Act 1994 made it illegal to stand at specific football matches.
The Safety of Sports Grounds Act 1975 also makes it a criminal offence for event organisers to admit spectators into sports grounds without a safety certificate from local authorities if the ground can accommodate more than 10,000 spectators (or more than 5,000 spectators for grounds hosting Premier League and English Football League matches).
Typically, sporting entities in the UK adopt one of the following legal forms (determined on a case-by-case basis but with the following generalisations).
Company Limited by Shares
It is most common for commercial sports organisations (such as football clubs and sponsors) to operate through a company limited by shares. Such legal entities can be “private” or “public” (ie, its shares are traded on a stock exchange). Key features include the ability to fundraise in return for issuing equity to investors and paying dividends from its profits to its shareholders.
Company Limited by Guarantee
A company limited by guarantee is typically associated with “not for profit” organisations. It is the legal form normally adopted by sports bodies (such as national governing bodies) which seek to reinvest profits back into its particular sport. There is no share capital so this structure also tends to suit sports organisations with a fluctuating membership.
A sports organisation which undertakes charitable and/or community purposes is often set up as a company limited by guarantee but there are other specific corporate forms available, including, CIOs (charitable incorporated organisations, specifically created for charities) and charitable CBSs (community benefit societies, registered with the Financial Conduct Authority).
Whatever legal structure is adopted, charity is a status that can only be achieved if the organisation fulfils certain legal requirements and is confirmed by registering with the Charity Commission.
Many local sports clubs/organisations exist based simply on an agreement between its members/stakeholders – for example, a governing constitution and/or set of rules – avoiding the formality and cost associated with operating as a company.
Whilst there are no existing governance laws that apply exclusively to sports organisations in the UK, there are a number of published codes, regulatory frameworks and applicable law that, together with public scrutiny, encourage and/or require good governance. As sport evolves into a multibillion-pound industry, there is increasing pressure on sport bodies at all levels to demonstrate good corporate governance.
Sport-Specific Governance Codes
The Code for Sports Governance (Code) published by UK Sport and Sport England in 2017 accelerated better corporate governance of sporting bodies. The Code sets out certain governance requirements under five principles (structure, people, communication, standards and conduct and policies and processes). Crucially, sports organisations must satisfy the relevant requirements in order to receive central public funding.
The Code is currently under review and it is expected that diversity targets will be introduced (in addition to the gender quotas already in place). The revisions are expected to be announced in spring and implemented before the summer of 2021.
The Sport and Recreation Alliance (the umbrella body for sport and recreation in the UK) has also produced a Voluntary Code of Good Governance, setting out seven principles of good governance that it recommends that sports bodies implement in order to perform their role effectively.
Owners' and Directors' Tests
Several sports bodies in the UK, notably the three main English football governing bodies – the FA, Premier League and English Football League (EFL) – have each established an Owners’ and Directors’ Test (ODT).
ODTs seek to protect the image and integrity of the relevant league as well as the interests of its other stakeholders by preventing unsuitable individuals from becoming an owner or a director of a club.
The ODTs are a prominent feature of football in England and regularly make the sporting headlines due to their controversial nature. For example, last year, the following came to light:
The ODTs are not restricted to football, with other sports bodies such as the Rugby Football League administering a similar test which requires influential persons at a club under its jurisdiction to satisfy certain requirements.
Sporting organisations (and their officers) must also comply with applicable law. For example, the Companies Act 2006 sets out a number of codified duties for directors of companies.
Traditional Revenue Streams
UK sporting organisations such as national governing bodies, leagues and clubs principally derive revenue by exploiting their commercial rights, as set out in 2 Commercial Rights.
The COVID-19 pandemic is having a significant impact on such traditional revenue streams, with the lack of live sport and behind-closed-doors action hitting match-day revenue (including ticketing, as mentioned at 2.1 Available Sports-Related Rights) and providing sponsors and broadcasters the power to renegotiate deals, particularly if rights cannot be delivered.
The UK government has reacted to the short-term financial distress suffered by many UK sporting organisations due to the effect of COVID-19 by providing specific financial support to sport, including:
Many national governing bodies and sports bodies are eligible for obtaining central funding through Sport England (established by Royal Charter in 1996). Sport England invests in the region of GBP250 million of National Lottery and public money every year. In light of COVID-19, Sport England announced a GBP200.5 million package of government and National Lottery funding, including a GBP16.5 million Return to Play Fund being made available.
For elite athletes, income from the National Lottery and the Exchequer is invested by UK Sport to maximise UK athletes' performance in global events, including the Olympic and Paralympic Games. Investment decisions are measured on factors such as medals won and identifying the nation’s most promising future champions. In December 2020, UK Sport announced its GBP352 million planned World Class Programme funding to 43 sports.
Sports organisations also secure funding from stakeholders, donors and, increasingly, private capital (see further 4.4 Recent Deals/Trends). It is up to each organisation to determine how to distribute money across its sport. For example, at the beginning of 2020, the ECB announced a five-year county cricket partnership funding agreement with its first-class county members.
The sports business investment landscape in the UK is experiencing a notable increase of private equity, venture capital and institutional investment and interest. This trend is only set to continue into 2021 and beyond as the sports sector evolves into an established market.
Despite COVID-19 bringing live sports action to a halt and preventing sports fans from filling stadia, investors are confidently backing sport. The value of sports assets and commercial rights are holding strong, notwithstanding the challenging climate, and the sector is closely aligned to – and can take advantage of – the lucrative media and technology markets.
In addition, sports governing bodies and leagues are considering alternative sources of investment such as private capital (which has not traditionally been the case) as they manage revenue shortfalls and working capital needs. Rights-holders will seek longer-term partnerships where investors can bring commercial expertise, connections, ideas and further sources of funding.
Recent examples include:
A SPAC (Special Purpose Acquisition Company) is a newly incorporated company that has no business/assets when it lists but, shortly after listing, it acquires one or more valuable existing businesses.
In 2020, it was announced that London-based Genius Sports is expected to go public through a merger with DMYD (a New York-listed SPAC) in the first quarter of 2021 with a reported value of USD1.5 billion and it is rumoured that RedBall Acquisition Corp will take a stake in Liverpool FC public. We wait to see if more UK businesses will follow, as an alternative to an IPO.
Private capital investment must navigate governance regulation (in particular around ownership and control – see, for example, 4.2 Corporate Governance), the establishment of breakaway leagues/events and reliance upon club/athlete/league performance. In addition, the ongoing pandemic will continue to cause concern and investors may seek the right to withhold investment should there be further disruption – as CVC reportedly requested as part of its Six Nations investment. Investment in sport will force private equity to accommodate the passion and emotions of fans not often present in many of their typical leveraged buy-outs.
More athletes and players are bolstering their earnings outside their playing careers by endorsing sport brands and/or investing in sports organisations. In February 2021, Therabody (a technology wellness firm) attracted investors including footballers Marcus Rashford and Kevin De Bruyne and rugby player Maro Itoje.
The door is open for athletes and players to invest in unique and purposeful sport properties such as women’s sport where lower valuations may make them more attractive.
Sports properties are increasingly exploring how to use non-fungible tokens (NFTs) to generate additional revenues and engage with fans. Currently, the key applications of NFTs by sports properties include the creation of digital collectibles (eg, digital trading cards featuring players or highlights) and "fan tokens" providing enhanced benefits to fans (eg, the right to access promotions or exclusive content). However, whilst presenting commercial opportunities to rights-holders, some NFTs may relate to assets which infringe their IP rights or facilitate such infringements. For this reason, it is important for rights-holders to understand and engage with NFTs in order to adequately protect their commercial rights and those of their partners.
Registering a Trade Mark
To register a UK trade mark, an application should be filed with the UK Intellectual Property Office (UKIPO), in compliance with the requirements set out in the Trade Marks Act 1994 (TMA 1994). An applicant can apply for:
UK trade marks can be filed in up to 34 goods classes and 11 service classes (using the internationally recognised Nice Classification system).
A trade mark application can be refused by the UKIPO on the basis of a statutory “absolute ground” (such as the mark exclusively designating the geographical origin of the goods/services). Recently, the UKIPO refused to allow Liverpool FC to register “Liverpool” for a wide range of classes, denying it the right to have exclusive rights to the name due to its “geographical significance” as a city. Interestingly, this contrasts with an earlier UKIPO decision to permit the registration of the club’s trade mark application for the well-recognised Liverpool city emblem – the “liver bird”. Here, it was found that, despite the city’s widespread use of the emblem, its incorporation within the club’s logo meant that the overall mark was distinctive and registrable.
A third party can then oppose an application on the basis of both absolute and “relative grounds” (for example, where the mark is identical and/or similar to an existing registration and there exists a likelihood of public confusion).
A registered trade mark has the following key advantages:
As an example, last year, British Gymnastics successfully argued a trade mark infringement against UK Gymnastics, in reliance to its registered trade marks.
The UK’s copyright law is laid down in the Copyright, Designs and Patents Act 1988 (CDPA), whereby copyright:
In general, ownership of the copyright is vested in the “author” of the work, with copyright protection lasting until:
There are various “permitted uses” under the CDPA which serve as a defence for alleged copyright infringement (such as non-commercial research and reporting), but in most instances the user must attribute sufficient acknowledgement to the copying.
“Fair dealing” must also be established in some cases, requiring the user to demonstrate that the copying does not exceed what an honest and fair-minded person would consider to be justified. This has no statutory definition and will be assessed on a case-by-case basis, depending on the facts in hand. There is also the common law defence of “public interest”.
In the case of ECB & Sky v Tixdaq & Fanatix, Tixdaq the developer of the Fanatix app was unable to demonstrate fair dealing through their uploading of eight-second highlight clips from cricket matches (the copyright in which was owned by the ECB, and Sky).
The UK also recognises a legal database right under the Copyright and Rights in Databases Regulations 1997. This is an unregistered right that arises automatically upon the creation of the relevant database.
A database right protects the contents of the specific database, where there has been substantial investment in the acquisition, verification and/or presentation of the data comprised within it (which British Horseracing could not establish in the landmark case against William Hill).
UK citizens/business will be ineligible to hold database rights in the EEA for databases created on or after 1 January 2021.
There is no standalone legal recognition for image rights (or personality rights) in the UK. Instead, individuals must rely on a myriad of IP and other rights to protect and exploit their image, including trade marks, passing off, privacy rights and robust contractual protections.
High-profile sportspersons may be able to rely upon the tort of passing off to prevent the unauthorised use of their image in the commercial context. To bring a claim, the individual must demonstrate:
One of the leading cases in this context is Irvine v Talksport Ltd, where Eddie Irvine, the Formula One driver, successfully claimed passing off against TalkSport for manipulating a photo of him holding a phone and replacing this with a TalkSport handheld radio, thereby falsely representing that he had endorsed the station.
The issue of unlawful exploitation of image rights has arisen on numerous occasions, particularly in the context of football players.
By way of example, last year the footballer Gareth Bale tweeted (following on an original tweet from fellow player Zlatan Ibrahimović) in relation to the alleged unlawful use of player images in the FIFA video game. However, EA – the developer of the FIFA video game – currently licenses player image rights (as well as other club rights, such as stadium names) collectively from the Premier League.
Intellectual property possesses significant intrinsic value to both sports governing bodies and players/athletes in the UK, each of whom regularly license their IP rights.
By way of example, a UK sports governing body may own all of the IP rights in a new event format, including the trade mark to the name of that event and the copyright in its rules and regulations. These can be licensed as individual rights or as a package, to the various different stakeholders involved in the hosting of that event (such as venues), those participating (teams or players/athletes) and to those exploiting commercial and media rights (such as broadcasters, sponsors and official suppliers).
The exploitation of IP through a licensing structure enables the rights-holder to retain control and ownership of the relevant rights, as well as generating revenue from the use thereof. The continued exploitation of these rights will also increase goodwill and brand value for the rights-holder over time.
Broadly speaking, the only formality required to effectively assign UK IP rights is for the assignment to be in writing and to be signed by the assigning and assignee party. In certain instances, for example in the case of registered trade marks, the assignment must also be recorded at the UKIPO to update the official record.
Use of Sports Data
Sports bodies and other stakeholders in the UK are using sports data in increasingly sophisticated ways to, amongst others:
Sports bodies are also increasingly licensing official data directly to third parties, particularly betting companies.
As a snapshot of sports data activities by sports bodies and other stakeholders in the UK over past 12 months alone:
Issues for Sports Bodies
While sports bodies may assume they have the right to collect and commercially exploit data relating to their sport (or to restrict a third party from collecting such data), the legal reality is often more complex. Sports bodies must consider the effect of data protection, contract, intellectual property and competition legal frameworks (amongst others), often in multiple jurisdictions.
In the wake of GDPR (as referred to in 5.6 Data Protection), fans and athletes are also becoming more alert to the use of their personal data by third parties. In July 2020, a group of over 400 professional football players in England and Scotland announced that they were taking legal action against various betting and data processing companies (including official partners of their clubs and leagues) for the use of player personal data without consent, in breach of GDPR, in what has been dubbed "Project Red Card".
As the amount of sports data in the UK being collected increases and the methods of exploitation become more complex, it is important that sports bodies and stakeholders establish and implement robust data policies which anticipate and mitigate potential legal risks. Nevertheless, as sports data becomes a more important commercial asset in the industry, the number of legal challenges between stakeholders are only expected to increase.
Data Protection Legislation
The Data Protection Act 2018 (DPA), the General Data Protection Regulation 2016 (GDPR) and, following Brexit, the retained UK version of GDPR (known as UK GDPR), may all apply to the use and exploitation of sports-related data in the UK.
Post-Brexit, GDPR is only relevant to UK organisations who are continuing to offer goods or services to, or monitoring the behaviour of, EEA individuals (eg, a club which sells merchandise to fans based in EEA countries).
The introduction of GDPR has had wide-ranging impacts on the ability of organisations to use and exploit personal data, which in the sporting context impacts upon both fan and player/athlete data.
Alongside the tightening of the regulatory landscape, there has been a huge increase in the use of new technologies and digital innovation, whether that is the use of wearable technology, augmented reality (AR) and virtual reality (VR) or matchday apps, to name but a few. This has necessitated a sharp focus on the data protection impacts of the use of the same, from the design stage through to the commercialisation thereof.
Sensitive Personal Data
In the context of more sensitive types of personal data (termed “special category personal data”) such as player health and biometric data, the ability for rights-holders to collect and use this data has become more challenging, in large due to the stricter requirements for obtaining valid consent from the individual.
By way of example, it might be difficult for a rugby club to prove that player consent is freely given (and that consent can be refused without detriment) where, for example, all players are being asked to use wearable technology during practice sessions, particularly because there is an inherent imbalance of power between an employer (club) and employee (player).
The DPA offers certain useful sports-specific exemptions to the requirement to obtain consent for the processing of special category personal data. These have been welcomed by governing bodies, anti-doping bodies and integrity units alike.
In reliance on Article 9(2)(g) GDPR and UK GDPR, where the processing of special category data is for reasons of substantial public interest, the UK introduced an anti-doping exemption and a sports integrity exemption, which have greatly facilitated the sharing of special category personal data for these legitimate purposes within sport.
Types of Dispute Resolution
In England and Wales, disputes are resolved through litigation before the national court system unless the parties agree to alternative dispute resolution (ADR).
Parties need to consider their relationship to one another and any agreement and/or rules that govern that relationship, which may require a certain type of dispute resolution over another.
However, where ADR or other internal dispute mechanism was not agreed to by the parties or provided for in relevant rules, then the national court system will be competent and parties would therefore not be required to, say, first exhaust governing bodies’ respective internal dispute resolution mechanisms.
For instance, Liverpool FC’s sponsorship dispute with marketing agency Winlink Marketing was resolved before the High Court, while it was an FA Regulatory Commission that ruled in the FA’s betting charge against England and former Tottenham Hotspur FC player Kieran Trippier.
ADR and the National Court System
Even where parties agreed to ADR, the national court system may still have a role to play. Following the conclusion of a sports governing body’s internal dispute resolution mechanism, national courts are competent to review the decision.
However, appeals against decisions of sports governing bodies’ judicial bodies are limited in scope and national courts effectively carry out a supervisory role to ensure that parties’ rights were duly exercised (see further 6.2 ADR, Including Arbitration and 6.3 Challenging Sports Governing Bodies).
Matters for Arbitration
The Arbitration Act 1996 (Act) provides for the possibility to resolve disputes by arbitration before an arbitral tribunal. The Act sets out certain formalities, including that the arbitration must be agreed to by all parties involved and be provided for in writing.
While much freedom is accorded to parties, certain disputes cannot be resolved through arbitration, such as criminal matters, insolvency proceedings or certain employment disputes. In such cases, the national court system will be competent by default.
In the sports sector, it is common for UK sports governing bodies to provide for dispute resolution through arbitration in their rules, which are accepted by participants before competing. For example, the FA, the Premier League and Premiership Rugby all have internal dispute resolution mechanisms.
Once the internal mechanisms are exhausted, a party may appeal the decision before national courts if they believe the decision was reached unlawfully. The Act allows appeals in cases where:
If no dispute resolution rules are provided for by sports governing bodies in their rules, parties may wish to resolve a dispute through arbitration before external tribunals, such as Sport Resolutions, an independent dispute resolution service that is based in London and that provides sport-specific ADR services.
Mediation allows parties to attempt to find an amicable solution without affecting their right to resort to a more direct approach if a favourable outcome is not found.
In England, Sports Resolutions (previously the Sports Dispute Resolution Panel) provides sport-specific mediation services. With lower costs, more flexible timeframes and increased confidentiality compared to litigation before national courts or even arbitration, mediation can be appealing to the fast-paced and sensitive nature of often high-profile sports disputes.
It is common for a UK sports governing body to provide in their rules how they will enforce sanctions, whether these are financial or sporting. Decisions of sports governing bodies that are considered arbitral awards can be enforced under the Act (as defined in 6.2 ADR, Including Arbitration).
Domestic sports governing bodies may seek to give worldwide effect to their decisions through co-operation with international federations. As referred to in 6.1 National Court System, Kieran Trippier was sanctioned under both the FA’s Regulatory Commission and the FIFA Disciplinary Code.
National Court Involvement
The decision taken by the judicial body of a sports governing body can be challenged to the national court system on limited grounds. It was confirmed that the national court system has a supervisory role in Bradley v Jockey Club.
Judicial bodies of sports governing bodies are held to the following standards by the national court system:
In many elite team sports in the UK, athletes are employed by their club under contracts of employment. Such arrangements typically include a number of standard terms agreed on a collective basis between relevant player unions, clubs and governing bodies, with commercial terms (ie, remuneration, the contract’s duration and any bespoke provisions pertaining to use of the athlete’s image) usually negotiated directly between the athlete and the club.
Under English law an employee accrues a range of legal rights. Where workers are not classified as employees, this status can be deemed dependant on circumstances designed to ensure employees cannot be cheated out of their rights simply by terminology.
The Employment Appeal Tribunal’s 2020 decision regarding cyclist Jessica Varnish’s failed claim that she should be deemed an employee of British Cycling gives a helpful summary of some key considerations determining employee status:
This is by no means an exhaustive analysis of the determinative factors for employment status, which is a notoriously uncertain concept in the UK.
Salary caps are becoming a feature of sport in the UK. To date, a sports governing body or league is generally free to exercise its discretion in setting salary restrictions in its rules, providing these are proportionate.
In February 2021, the English Football League’s (EFL) salary cap on clubs competing in Leagues 1 and 2 (the third and fourth rungs of the football ladder) was withdrawn after an independent tribunal found that the rules had been implemented without proper consultation with the Professional Footballers’ Association (PFA). It is now expected that the EFL and PFA will work together to implement some form of financial control rules.
The salary cap in Premiership Rugby led to an important dispute between Premiership Rugby and Saracens FC. The headlines are as follows:
Compatibility with Competition Law
Salary cap rules can raise issues with wider competition laws and the common law doctrine of restraint of trade. Where a rule impacts upon an athlete’s ability to earn a living, the body imposing the rule must demonstrate that the rule is a legitimate restriction and is proportionate in its approach. In the Saracens case, it was found that the salary cap was legitimate and proportionate and promoted the financial health of Premiership Rugby clubs, so was considered a permissible restraint.
Statutory Employment Law
Where UK athletes are employees (see further 7.1 Sports-Related Contracts of Employment), the right not to be unfairly dismissed, family rights including maternity leave, and the right not to be subjected to discrimination, will generally override any contradictory provisions in their contract.
It is fairly standard, however, for UK sporting employment contracts to require disputes to be addressed via a bespoke dispute resolution forum, such as Sports Resolutions, which can be an effective method for an athlete to enforce their statutory employment rights.
Constructive Dismissal Case Study
Under his employment contract with Newcastle United FC, former manager Kevin Keegan had the final say in recruiting players. When in practice this did not happen, he resigned, claiming that he had been constructively unfairly dismissed (ie, that the club’s actions constituted a repudiatory breach of contract, entitling him to treat the contract as having been terminated by the club). The Premier League Managers’ Arbitration Tribunal found in Mr Keegan’s favour and awarded him compensation for constructive unfair dismissal.
Brexit and Free Movement
When the UK was a member state of the EU, citizens of the European Economic Area (EEA) enjoyed a right of free movement and, as such, UK sports governing bodies could not impose restrictions on the number of EEA citizens they allowed to compete in their competitions, or to be included within a club’s squad.
Since 31 December 2020, the UK is no longer subject to free movement rules and all foreigners (including EEA citizens) require a permit to work in the UK, except for Irish nationals; further, EEA nationals (and certain others) who were already residing in the UK can apply for "settled status" under the EU Settlement Scheme, which allows the individual to remain in the UK indefinitely.
Obtaining a Work Permit
Foreign athletes (and other sporting staff) generally need a work permit issued by the Home Office in order to be permitted to work in the UK. As such, arrangements are often made between the Home Office and the relevant sports governing bodies.
This commonly involves a sports governing body granting a Governing Body Endorsement (GBE), depending on whether the athlete meets certain criteria agreed in advance with the Home Office. Where a GBE is granted, the athlete is then usually granted a work permit by the Home Office without the need for further analysis to be undertaken.
In light of Brexit and in advance of the January 2021 transfer window, the FA agreed with the UK government and key football stakeholders the criteria for granting of a GBE, which provided for automatic approval if a player from one of the top 50-ranked FIFA nations had featured sufficiently for their national team, or if players accrued sufficient points based on sporting criteria (such as the number of club matches played and their club’s progression in European club competitions). There was also an Exceptions Panel to determine whether a GBE should be granted to players falling short of the required points total.
Traditional Esports Market
The traditional esports market in the UK features non-sport video games (such as League of Legends and Counter-Strike) and is already relatively sophisticated: tournaments, teams and individual players have huge followings, live events fill arenas, prize money on offer is substantial and betting on game outcomes is available.
Traditional sports with an “obvious video game” have also been successful in the UK, including the hosting of the FIFA eWorld Cup from the O2 Arena in London since 2018. Consequently, many esports teams and game publishers are based in the UK, including Guild Esports – a new global esports business backed by David Beckham – which closed an IPO in October 2020.
COVID-19 Effect on Esports
COVID-19 has undoubtedly accelerated the professionalism and commercialisation of esports and virtual sport in the UK, as it has across the world. People are spending more time at home and an increasing number have turned to esports as entertainment. For example:
Traditional Sports and Esports
Traditional sports are also embracing esports and virtual sport with real purpose and seizing the opportunity to engage with its fanbase, sponsors and potentially a new and untapped audience. For example:
The Covid-19 pandemic has had, and continues to have, a significant impact on sporting life in the UK.
Initial Reactions to COVID-19
Initially, all live sport action taking place in person was prohibited during the country’s first lockdown announced by the UK government on 23 March 2020.
Governing bodies and event/tournament organisers reacted nimbly and quickly drew up return-of-sport plans, navigating through contractual terms (such as force majeure), relevant legislation (such as duty of care and new COVID-19 laws) and UK government guidance. This led to the development and implementation of protocols and policies to mitigate the risk of the virus to sporting participants.
Behind Closed Doors
As restrictions eased during late spring/summer of 2020, certain elite sport resumed behind closed doors under the new protocols and policies and, for the first time for many, outside traditional calendar windows.
In other cases (particularly for lower leagues and women’s sports), seasons were curtailed or cancelled altogether, with losers (such as South Shields FC) mounting unsuccessful challenges against such decisions.
The sector is facing continued disruption, currently including:
As set out in further detail at 4.3 Funding of Sport, many sports clubs are struggling financially due to the impact of COVID-19 – for example, the loss of match-day revenue.
Some sporting employers negotiated salary cuts and wage deferrals, whereas others have taken up the offer of financial support from the UK government. Time will tell if this serves as a mere plaster to deepening financial distress across the sector in 2021 and beyond.
Disruption to Sport Rights
As set out in further detail in 2 Commercial Rights, the pandemic has caused significant disruption to the relationship between broadcasters and rights-holders, including, in some cases, the need to agree significant rebates and refunds.
Whilst COVID-19 effectively pressed pause on women’s sport in the UK, with far-reaching cancellations and curtailments, there are encouraging signs that women’s sport continues to demonstrate mass-market appeal and commercial potential, including the following developments:
With continued investment from rights-holders, broadcasters and sponsors we expect women’s sports to only gain momentum from here.
The main regional issues impacting sport in the UK are the fallout from Brexit and the ongoing COVID-19 pandemic, as highlighted below:
There are big themes impacting on sport in the year ahead. While some will appear more localised but with the potential for wider ramifications, others will be widespread, such as the COVID-19 pandemic. As is typical in sport, often the direct implications can be readily identified, whereas the indirect effects will need more careful consideration.
COVID-19 and Memberships
We have all witnessed the impact of COVID-19 on big-ticket sports events, with cancellations, delays and changes to event formats. As a result, economic decline has also occurred, leading to inevitable financial and logistical stress on sport, be it in relation to the commercial value of sponsorship arrangements, hospitality uptake, ticketing or participation. Government support has been welcome for many sports, but the effects of the pandemic will be long-felt.
Another effect of the crisis may be sports clubs looking to restrict participation, and potentially even membership, as a result of COVID-19. Echoing the "no vax, no job" question being considered by some employers, governing bodies and clubs are beginning to assess whether or not it is lawful and appropriate to impose restrictions on sports participations and/or membership, according to whether individuals choose to receive a vaccination or not.
This question may appear to be less significant or relevant to a junior gymnastics club, where the membership comprises under 18s, but what of the golf club with members of all ages, the elderly bowls club – or, for that matter, clubs that host associated activities such as a ballroom dancing? Given that uptake of the vaccine has so far not been universal, but it is seen as the only way back to normal, governing bodies and clubs are beginning to consider whether to make vaccination a prerequisite of membership.
Ignoring for a moment questions of practicability and policing any such requirement, requiring vaccination for membership or participation could throw up challenges. If a typical club, being an unincorporated association, is the sum of its members bound together by a common set of rules, would a membership requirement of this nature offend any law? Questions could well arise around privacy issues, potential health and disability challenges, but also on beliefs and laws relating to the same (see the Equality Act 2010).
A significant challenge around the introduction of such a rule could be more practical – how and when to introduce any such rule? Presumably, members who have received the vaccine would be in favour, yet those same members would be those least impacted by the rule. Indeed, if the vaccine effectively reduces the prevalence of COVID-19, does the impetus to change a membership rule diminish with the prevalence of the virus diminishing? Perhaps much will depend on whether medical advice develops to require the vaccine to be received annually or with regularity, or in response to mutating strains. Yet, of itself, this could make any rule more difficult to draft and enforce.
Typical considerations of grassroots sport differ from elite or performance sport. Most sports clubs are, after all, communal and consensual in spirit, with members co-existing within agreed rules providing a platform for harmony in the shared pursuit of a sport. Elite sports are far more hard-nosed and commercial considerations abound; for example, would tennis impose a COVID-19 passport if it led to the legendary Novak Djokovik – who is reportedly anti-vaccination – being excluded from the sport? A so-called "vaccine rule" may be possible in future, but, as things stand, the lack of widespread global availability of the vaccine must surely be a major obstacle to introducing a rule in the near future.
Hardening of Regulatory Attitudes
Another outcome of the pandemic is the potential move to tougher regulation in the sporting world, with stricter rules and harsher sanctions – including such things as salary caps to regulate financial fair play, and the introduction of caps on fees for agents. Any such measures will be hotly contested, however, as has recently been seen in the success of the Professional Footballers' Association (PFA) of England and Wales challenging the English Football League's (EFL) salary cap.
The tension between participants and regulators will undoubtedly continue. For agents in football, 2021 could be a year for some very high-profile disputes around regulation. Aside from introducing commission/fee caps for agents, there are a number of issues to resolve, including whether agents representing coaches should be regulated, whether an exam should be required for all agents, and the continually vexed issue of conflicts of interest – particularly whether the Fédération Internationale de Football Association (FIFA) should be banning an agent/associated agents from acting for effectively all the parties on one transaction. As economic stresses continue, tightening of regulation may well continue.
Growing Litigious Nature of Sports and Prevalence of Disputes
With a hardening of regulatory attitude, disputes are likely to continue to increase. One area that will see focused attention is that of sports data and its day-to-day use. One of the most high-profile disputes in recent years has been between Sportradar and the English Premier League’s official data collector, Genius Sports. The dispute is related to Sportradar’s inability to exploit such data itself without going through Genius. The outcome of the case, which raises interesting arguments of competition law, is expected in 2021 and will certainly have a major impact on how live match data is collected and exploited. This is a case that should be monitored and will likely be closely observed by bookmakers (and punters) involved in betting on English and Scottish Football, and who Sportradar contend stand to benefit from increased competition in the market.
Claims in relation to data are relatively novel, and are a sign that data protection potentially gives sportspeople and stakeholders a wide set of rights. Businesses using this data need to be aware of the potential for such claims. Anyone working in the sports industry should carefully consider how they are using personal and other related sports data and, if resources allow, consider if the norms being applied and followed are appropriate. We are seeing far more data requests being used prior to disputes, during disputes, during investigations, and disciplinary procedures, in sports. This will only increase. All involved in sport will need to ensure that their data management practices are up-to-date and appropriate.
Concussion/Injury Claims – Rugby and Football
Concussion – noted as a potential "hidden epidemic" – continues to be a highly controversial issue in modern-day contact sports, and here again a hardening of attitude and litigation is looming. In the UK, both football and rugby have tackled the issue in very different ways. There appears to be a general consensus that rugby authorities have historically tackled the issue more proactively than their football counterparts. To ensure player welfare, World Rugby has developed concussion management recommendations and protocols.
In terms of developments in 2021, one of the most significant for concussion in sport will undoubtedly be in relation to the former rugby union players who have launched legal actions against rugby's authorities for allegedly failing in their duties, claiming that they were not adequately protected against head injuries. The implications of this case could reverberate throughout the sport and spread more widely, with developments including in football and the use of concussion substitutes, the focus on heading and early onset dementia and in other sports, including the more remote example of Scotland's shinty, legislating to fundamentally change their contests by requiring protective headwear to be introduced (albeit with a long lead time).
The International Conference on Sports Concussion and Traumatic Brain Injury will be held in Budapest, Hungary on August 23–24 this year. Undoubtedly there needs to be a keen appreciation that, whilst sport can often have inherent danger, to which participants consent, participants typically cannot consent to negligent treatment, be it the development and application of sports rules or the care deployed by medical professionals assessing injury in competition or post event, or permitting sportspeople to participate when not recovered from injury.
Individual Athletes' Rights versus Team Rights (Commercial Exposure, IOC Rule Changes)
Disputes regarding individual athletes' image rights and data are likely to gain real traction in the coming years – particularly on the back of the issue of whether EA Sports can use it in the way they currently do on games such as FIFA 2021. Current football stars such as Zlatan Ibrahimović, for example, have expressed an opinion that they should demand payment for such use or would want to see their image and data being taken off the game in future.
If this was to happen, the real losers would likely be players in the lower divisions. When footballers join the players associations in the countries they play in, they allow those associations to license their images to EA Sports through the Fédération Internationale des Associations de Footballeurs Professionnels (FIFPro). The royalties are then used to fund those associations to represent and help their members. A reduction in royalties would result in less support being available.
In terms of International Olympic Committee (IOC) rule changes, the rules on staging protests during the Olympic Games will be discussed with athletes with a view to possible amendments to Rule 50 of the Olympic Charter (which states that the field of play and medal events should be "separate from political, religious or any other type of interference"). In light of various social protests that took place over the course of 2020 and became part of the sporting landscape, the US Olympic Committee has indicated that no disciplinary action will be taken against athletes protesting (despite the requirements of Rule 50).
The IOC has defended the rule, saying that political statements have no place inside the competition venues at the Olympics. Despite this, the IOC has sent a survey to athletes across the globe for their opinions on Rule 50 and other issues. The IOC athletes' committee will use that feedback to make its own recommendation about the future of Rule 50. Results are expected in the first quarter of 2021.
The rights of individual sportspeople will continue to be firmly on the agenda in 2021, with further challenges likely, whether it be developments of arguments similar to those in the case of the UK cyclist Jess Varnish (and evolving arguments about duty of care), the continued focus on safe participation in sport, or sportspeople seeking greater representation and influence in sports decision-making and governance. The rights of transgender participants are going to continue to be a focus for some sports, as governing bodies weigh up and decide on how to regulate participation.
Whether in light of the pandemic and the shift to remote coaching and virtual classrooms for some sports, or the ongoing investigations, challenges and cause for reflection resulting from Athlete A (a 2020 documentary film charting sexual abuse within US gymnastics), safeguarding will continue to increase in importance in 2021 and beyond. Monitoring and appreciating the mental health and well-being of athletes and young people at this time will become increasingly important, as will ensuring that safeguarding structures throughout sports properly support minimising the risk of difficulties arising, and giving people the best of opportunities to reach out, either to report concerns or to receive support.
The prosecution and presentation of safeguarding cases will become more difficult as people accused of not properly adhering to coaching standards (or worse) seek to defend themselves with ever-more vigour. Governing bodies will need to ensure that cases are carefully prepared and focus on presenting sufficient good evidence to justify and establish a prima facie case. Should an accused person then stay silent in response to the case, proposing that they have a supposed right to remain silent, they will quickly find that the case is established, including with an inference drawn from the silence adopted by the accused.
Brexit and the Free Movement of People
The sporting world will feel the effects of Brexit, not merely in relation to professional clubs' recruitment and acquisition of talent. The biggest impact of Brexit will likely be the end of the free movement of people, with all overseas players joining English clubs having to qualify for entry through a points-based system, with points being awarded for senior and youth international appearances, club appearances and the pedigree of the selling club. Clubs will no longer be able to sign EU players freely; instead players will be required to obtain a Governing Body Endorsement (GBE).
When signing players in recent years, many sports have relied on the "Kolpak rule", created when the European Court of Justice found the Cotonou Agreement meant Slovak handball player Maros Kolpak should not count as a non-EU player in the German handball league. This then allowed players to sign contracts with UK-based clubs without having to be fielded as overseas players. However, this agreement came to an end with the expiry of the Brexit transition period on 31 December 2020.
Another important issue for some sports will be the freedom available to sportspeople to travel to Europe to either train or coach. Skiing, racing and cycling could all feel the impact of the restrictions now imposed, which may require extensive steps to be taken to acquire permissions to visit European countries.
Esports and Other "Non-traditional" Sports
Many predict that 2021 could be the year that esports really take off, with the global esports market expected to generate around GBP1 billion in annual revenues, primarily from sponsorships and advertising, and an estimated global audience of 600 million fans. In the next 12 months, traditional sports franchises may begin to better establish effective business and broadcast models for their esports league counterparts, delivering fan experiences with mass appeal and determining the business model that will drive long-term growth and profitability.
There is also a perception that many other non-traditional sports will continue to grow in popularity, with this popularity accelerated by the current pandemic. Various sports –such as formula one racing, baseball, basketball and even sailing – have shown themselves adept at change and introducing new developments to modernise or appeal to new markets. This will need to continue, to ensure that sports maintain relevance and interest to the modern, digital world. It is also perhaps very timely, if the resource can be found to invest in developing this emerging area, because with everything online, we can far more readily access, participate and observe esports from our homes during lockdown.
Artificial Intelligence (AI)
Technology is going to impact beyond the presentation and format of sports, with the role of AI set to increase ever-further over the coming years. Data analytics are already widely used in sport for important analytical purposes in recruitment and scouting. The use of data here is only going to grow, with subjective opinions being phased out by data-led judgements. The "video assistant referee" (VAR) is likely to be a sign of things to come.
One good example of the increased role of AI in sports would be the use of "GPS sports vests", an undervest that is commonly worn by professional sportspeople as they take to the field for competitive games, or other GPS-driven technology including apps (such as Strava). In team sports such as rugby, football and hockey, in the past few years these vests have gone from being seen at only the most high-profile clubs to now being seen in almost every professional league around the globe. The vests are used to track the movement, fitness and general expenditure of energy attributable to each individual athlete. No longer does a manager need to watch the game to see how much effort a certain player is making – he or she can verify their impression by looking at the data post-match. AI like this will only become more prevalent in global professional sports going forward.
The use of AI in the media (automatic generation of content), advertising (showing adverts based on excitement levels), and so on, could be revolutionised in the coming years as we become ever-more reliant on AI. In terms of fan engagement, data-driven platforms and AI can assist in providing sports clubs with a more accurate and better understanding of fans' behaviour and spending patterns. There is also greater scope for communicating with fans.
This will change not only the requirements of data use and adherence to data protection laws, but it will also change commercial arrangements with sponsors and stakeholders, featuring far more often in commercial agreements. Players' transfers, sportspersons' sponsorship and endorsement deals will also become more focused on AI stats and returns.
Sensors are also going to be increasing in use, with untold consequences. Similar to GPS systems, sensors can be imbedded into sporting gear (t-shirts, shorts, trainers, etc) to not only provide live data to athletes but also to their support teams. Sensors have been mooted for a wide variety of uses, from correcting yoga poses during an online session conducted in lockdown to adjusting posture and body mechanics as the developing tennis star seeks to increase their speed and perfect their first serve. We already have a huge industry for wearable tech (GPS and heart-rate watches, for example) and the development of sensors will need to be considered carefully by regulators and stakeholders.
To take an example, most golf enthusiasts have watched – with differing degrees of appreciation – the transformation that American golfer Bryson DeChambeau has made to his body, consuming vast calories, downing multiple protein shakes, and "bulking up" like no golfer before, with the aim of hitting the ball as far as humanly possible. Bryson, known as "The Scientist" for his approach to finding gains, has amazed fans with his approach, with those fans witnessing technology-enhanced live broadcasts, with TrackMan and Toptracer laser units measuring club-head speed, ball speed, carry and roll-out distance to give television spectators real-time live information on the shots being performed, to help appreciate the gameplay.
Will we see more feedback broadcast from sensors on the player himself or herself in the year ahead? Heart-rate and blood-pressure sensors in the form of Thump sensors are already worn by many golfers to measure their strain, fatigue and physical performance. Would witnessing Dustin Johnson's heartbeat remain sub-80 whilst attempting to win another US Masters add to the viewing experience? For this spectator, yes, it would be a new and added dimension. In a game where analysis and data are adding ever-more to the spectacle, could privacy and data obstacles be overcome to enhance coverage? Probably. However, terms of participation, data collection, data use and associated issues would need to be carefully planned.