Background: Recent Developments in Venezuelan Sports

In recent years, sports law developments in Venezuela have moved from an electoral sports organisation field towards a professional sports field. This article will discuss the trends and developments in Venezuelan sports law since 2020.

In the last decade, the legal sports environment in Venezuela saw key developments in sports organisation, specifically in electoral law. This is partly because in 2011 a new Sports Law was enacted, and also partly owing to the many changes in the Ministry of Sports.

The Sports Law and its by-laws created more complex sports organisations, especially for national federations and regional associations. New standards for the composition of general assemblies, boards of directors, disciplinary commissions and auditor commissions were imposed, as were requirements under statutes – for example, when creating a provisional commission to handle the organisation if it does not have any other active body. A national registry was also created for everyone linked to the sports world. Implementation of this law was essentially in complete chaos until 2021–2022.

Since 2010, there have also been many changes regarding the position of the Ministry of Sports. While between 2000 and 2010 there were only three ministers, between 2010 and 2020 there were seven ministers, two of which held the position twice. Every time a Minister of Sports was replaced, national federations’ elections were heavily disputed. The interpretation of the new Sports Law changed many times and made the functioning of sports organisations very difficult.

During this decade, many cases involving elections within sporting bodies were brought to the Electoral Chamber of the Supreme Tribunal of Venezuela, resulting in diverse (and in some cases, conflicting) jurisprudence. However, by 2020 all the main legal points were resolved, one way or another. It became clear that political support from the government was the driving force behind the main legal points in the relevant decisions. Thus, there seems to be little point in studying legal issues when the answer depends on which government official supports solving the case.

This trend seems to have reached an end in 2022, with the Vice-President of Venezuela having allies in many sporting bodies, including the Venezuelan Football Federation (VFF) and the Venezuelan Olympics Committee. However, some sporting bodies are still involved in judicial disputes before the Supreme Justice Tribunal because of elections; though there has been no major development in electoral sports law since 2019 worth studying.

Since 2015 (and in particular after 2017), the USA and the EU have imposed numerous sanctions on Venezuelan officials, the government and PDVSA (the country’s main petroleum company). This, together with the lack of maintenance of PDVSA infrastructure, created a problem that affected the country’s earnings. For the sports world, this has mainly meant less investment from the government or from people connected to the government. However, means of bypassing these sanctions were later found.

For context, it is important to be familiar with the professional sports environment in Venezuela, which is comprised of three disciplines: baseball, football and basketball.

Baseball

Baseball is the crown jewel of professional sports in Venezuela. It has a huge fan base, and generates revenue mainly from sponsors and ticketing and, in some seasons, from the Venezuelan government. Professional baseball is organised by an independent league, the LVBP, which arranges tournaments and is a winter league in the Caribbean connected to the Caribbean Series Championship. The season is very short, from October to the second week of February. Many players from Major League Baseball (mainly Venezuelan but also other nationalities) are loaned to Venezuelan teams. These loans are made through the Winter League Agreement between the Professional Baseball Confederation of the Caribbean (and its leagues) and Major League Baseball.

Football

Regarding football, Liga FUTVE organises professional tournaments, but is supervised by the VFF. The professional league does not have a massive fan base like baseball, and its season goes generally from February or March until December. However, it does see a lot of investment. While football is a very popular sport in Venezuela, people do not seem to like the national league. Nonetheless, owners’ investments in their teams are the main revenue of the sport. Revenues also come from sponsors, from qualification for international tournaments and from player transfers.

Basketball

For basketball, the Professional Super League has within its assembly the Venezuelan Basketball Federation. Over the past few years, political disputes have changed the environment of professional basketball. The Venezuelan Basketball Federation was the subject of a huge dispute between several groups that led to an unbalanced environment until 2019. Because of this, the sports body organising the professional league changed from the LPB to the SNB, and then to the SPB in 2023. This political turmoil, along with COVID-19, made the situation for the basketball season change repeatedly. Thus, every year begins with the uncertainty of when the professional basketball season will begin. Teams normally play for about three to six months, and the changes made to the league expanded the number of teams from ten to nearly 20; though several teams have since left. At the moment, professional basketball is an unstable environment.

Finances

Regarding the issue of lack of income in the professional sports environment, COVID-19 arguably created problems for the finances of professional clubs in Venezuela. This is certainly the case for some clubs, but, in the authors’ opinion, not for all. For baseball and basketball, the government allocates a certain amount of money for teams to function every year. Baseball teams also generate a lot of revenue with ticketing and sponsors. Notwithstanding, several baseball seasons were affected by the sanctions – some players from Major League Baseball did not wish to come to play in Venezuela, owing to fear of sanctions. Specifically, two teams were exposed as having links to the government, rendering them unable to have players from Major League Baseball, and resulting in fewer attendees at stadiums. Basketball also generates revenues from sponsors, though not as much as baseball.

The government does not allocate money for football, but most owners of teams (as with basketball and baseball) are linked to the government and/or are contractors of the government (or in some cases the government itself owns the teams). The reality is that the origin of sports teams’ income mostly remains unknown, and it has never been proven that COVID-19 reduced income for clubs.

Nevertheless, during COVID-19, FIFA issued guidelines on how to work in such times, stating the possibility of reducing players’ salaries. This led to heavy discussions between clubs and players in football, with players becoming more dependent on clubs and losing bargaining power. Many football and basketball clubs started failing to fulfil their obligations, leading to players (at least in football) claiming money owed by the clubs. However, when the decision came to order the clubs to pay, the huge hyperinflation destroyed players’ earnings. As such, players began stipulating their rights according to Venezuelan labour legislation and higher interest rates for the late payments of their salaries.

In the case of baseball, although revenues were low, no such problems occurred as such clubs normally pay their players.

It should be noted that sports clubs have (without legal basis) indicated that they do not need to pay the legal benefits of sports employees, only their salaries. This narrative is only supported by the National Dispute Resolution Chamber of the Venezuela Football Federation, which normally states that it does not have jurisdiction to decide over such legal benefits, as they fall under public policy. However, the same body does render decisions regarding unpaid salaries, which also fall under public policy in Venezuela.

Sports Employees’ Labour Rights

Venezuelan labour legislation is very favourable for employees. It establishes many rights for workers, and these rights also apply to professional sports employees.

The Venezuelan Labour Law has a special category concerning sports employees; this category is part of a bigger section titled “Special Modalities of Employment” involving different kinds of employment with special rules.

The sports employees category clarifies that a special professional sports law should be enacted; however, to date (February 2024), such law has not been issued. Consequently, the Labour Law dictates that any lacuna in the “Special Modalities of Employment” section should be filled with the other regulations of the Labour Law. Hence, sports employees have all the same rights as normal employees, except when a special regulation applies.

What is a sports employee?

Labour law indicates that sports employees are sportsmen, technical directors, coaches and physical trainers who render services to others different from themselves, under their dependency and for remuneration.

What are the special regulations for a sports employee?

The special regulations can be summarised as follows.

• The right to have a written contract.
• The right to refuse a transfer.
• The right to obtain 25% of the revenue for a sporting organisation for a transfer of which they are part.
• The right to rest at least one day a week, with the understanding that Sunday is not secured as a rest day, as for other employers. This also means that sports employees do not enjoy special payment for extra hours, nocturnal work or transportation time.
• The right to transportation and accommodation.
• There is no right to equal work or equal salary – ie, this is a modality based on the talent of the worker, not on their position.

The other two rights recognised in the special regulations are the same as for normal workers – namely:

• the right to a modality of work established based on seasons, events, tournaments or matches, or indefinitely (if there is no preference); and
• the right to a 40-hour labour week.

What are the other rights?

There are several other rights for normal employees, but this article will focus on the labour benefits of sports employees and termination of contracts.

The following are the main legal benefits of sports employees:

• the right to remunerated vacation days every year;
• the right to a vacation bonus;
• the right to (at least) one month’s salary for utilities;
• the right to savings after the termination of the employment contract (prestaciones sociales);
• the right to compensation for wrongful termination of the contract; and
• the right to not recognise a termination agreement if it is not properly made.

What has been debated?

Although the VFF’s Dispute Resolution Chamber does not grant legal benefits for sports employees, it is now unquestionable that sports employees must be paid.

Ordinary tribunals in different cases have ruled that vacation bonuses, utilities and savings apply to sports employees. Decisions prior to the Labour Law 2012 and after highlight this, such as:

• Second Labour Tribunal of the first instance of Mérida, Pedro Vielma (Football Player) v Estudiantes de Mérida FC, dated 10 May 2005;
• First Labour Tribunal of the first instance of Monagas, Pablo Galavis (Football Player) v Monagas Sport Club SA, dated 7 December 2007;
• First Labour Tribunal of the first instance of Lara Rene Higuita (Football Player) v Guaros de Lara Fútbol Club CA, dated 2 July 2009; and
• First Labour Tribunal of the first instance of Táchira Carlos Becerra (Cyclist) v Loteria del Táchira and Asociación Civil Sport Táchira, dated 14 January 2015.

However, the most important decision on this topic came from the Supreme Justice Tribunal on 15 December 2022, where (after several years) ex-football player Rafael Castellin finally obtained justice against Asociación Civil Deportivo Lara. This decision confirmed that football players have the right to claim their legal benefits, and that decisions of the VFF’s Dispute Resolution Chamber are not valid if they do not concede such right.

Sports Tribunals, as per the Court of Arbitration for Sports (TAS), have resolved this matter in similar ways. The following four decisions linked to Venezuelan football are key on this subject.

• TAS Award 2020/A/6895 was the first decision to recognise the legal benefit of savings (prestaciones sociales) for sports employees. The debate concerned whether this could be included in the salary amount and not paid in addition to the salary. Labour jurisprudence states that this concept is separate from the salary and could never be included in the salary amount – as such, it was awarded. The situation is different for other concepts such as bonus vacations and utilities. In those cases, it was established that the salary includes vacation bonuses and utilities (in Venezuela, this is known as “package salary”).
• TAS Award 2021/A/7899 followed the 6895 decision, but in this case the contract did not establish that the salary included the concepts of savings, bonus vacations and utilities. Thus, the TAS granted all the legal benefits requested. It is also worth noting that in this case the claimant was a coach.
• TAS Award 2022/A/8735 confirmed the previous two cases. However, there was an interesting difference regarding the annual interest rate for late payments. In this case it was recognised that, because of Venezuela’s record-high inflation, an interest rate of 17% for late payment was appropriate, as opposed to the 5% that Swiss law normally awards. It is also worth noting that in this case the claimant was a physical trainer.
• TAS Award 2023/A/9397 was interesting, as here the appeal came from a FIFA decision, not from the NDRC of the VFF. Despite this, Venezuelan labour law was applicable, as were the criteria of the first three decisions (except regarding the interest rate). It is also worth noting that in this case the subject was a foreign football player, and the rights were still applicable to him.

In summary, sports employees have rights to their legal benefits.

Compensation for Termination of Employment Contracts

When considering the amount to award in the unilateral termination of a contract in Venezuelan football, the VFF has referred cases to the FIFA Regulations on the Status and Transfer of Players (RSTP), Article 17, which is also recognised as a kind of regulation by Venezuelan labour law. This creates an interesting jurisprudence regarding Venezuelan football, and the following are of note.

• TAS Award 2020/A/6698: in this award, the player’s contract was terminated by their club for alleged bad behaviour. He then went to another club where he earned a bigger salary. He made a huge claim, and the TAS did not recognise the bad behaviour as a just cause for terminating the contract; though it only granted compensation for a small amount. In applying Article 17 of the RSTP, the salary of the new contract had to be deducted from the compensation to be awarded. No other compensation was awarded in this case.
• TAS Award 2020/A/6895: here the club did not pay the player for over nine months. Despite this, the player only terminated the contract with just cause when there were just 15 days remaining on the expiry of the contract. This could have resulted in a situation where the compensation was only 15 days of salary (because of Article 17, RSTP). However, specificity of sport was requested as the player was not paid over 80% of the contractual salary; and this was granted. Thus, the compensation for specificity of sport (taking into consideration that the player did not receive his salary over nine months) was an extra six months’ salary.

In summary, the solutions reached by sporting bodies are applicable for the calculation of termination of a contract.

Compensation for Player Transfer

Venezuelan labour legislation establishes that when transfer of a player occurs and the club receives compensation, the player is entitled to 25% of that compensation. TAS Award 2022/O/8940 addressed numerous issues in this regard. Here, the club argued that national legislation stated that the transfer should produce monetary benefits for the club. It argued that this meant the club had to produce dividends; and in this case it did not produce any dividends in the year the transfer was made (and others). The club presented tax declarations, but ultimately its interpretation was not correct. It was established that, under the regulation, if there are benefits for the club in the transfer of the player, the stated 25% is meant for the player.

Validity of a Mutual Termination Agreement

It is common to find cases where the sports employee has signed a document resigning rescuing labour rights, or indicating that there are no overdue payables, when there are. This is normally a document of mutual termination. The question is whether this mutual termination is valid; and this formed the discussion in TAS Award 2022/A/8735. Here the arbitrator indicated that, because of the principle that labour rights cannot be renounced, the termination agreement according to Venezuelan labour law must have certain conditions, which in the present case were not met. Of these conditions, the resignation of rights was clearly contrary to what occurred in the case, where there was a general resignation not mentioning any rights in a specific manner. For this reason, the document was not valid for preventing the payment of the legal benefits.

The Obligation to Pay Where the Creditor Wishes

Another important issue in Venezuela is its control over the exchange of currency and that, since 2018, different nations have imposed sanctions on the country. This has been used by clubs to try to avoid payment, or to justify how difficult it is to make a transfer. However, the truth is that the people who own clubs in Venezuela normally have the means to achieve these payments (even if this takes time). Such people have also proposed paying in cash, without consideration of the risks posed to other parties.

In this regard, TAS Award 2013/A/3323 is important to note, as it establishes that payment must be made where the creditor wishes.

Other Recent Important Matters: the Recognition of Doping Legislation in Venezuela

In 2016, a famous doping scandal occurred owing to a sanction against baseball player Alex Cabrera (who has close ties to Venezuelan government officials). He challenged the legal procedure in the LVBP. One of his arguments was that the procedure violated his due process right. Consequently, the first-instance Administrative Court not only suspended the sanction during the baseball player’s trial, but also suspended the professional league’s anti-doping code and the sanctioning procedure. Fortunately, all these measures were eliminated by Constitutional Court Decision No 232 of 11 June 2021, recognising the International Convention Against Doping in Sport as ratified by Venezuela in 2008.

The Future

For sports employees, there are still many rights to fight for, including compensation for violation of the right to medical care and the right to social security. Discussions regarding a professional sports law seem a distant prospect, even though many sports clubs have deep bonds with government officials. At this time, everything is connected with the presidential elections and the legitimacy that follows; thus, sports law is not currently a priority. Nevertheless, the authors believe that professional sports legislation will continue to develop.