Shifting ground: competition law and the future of sports governance

Introduction

Chelsea’s recent triumph in the FIFA Club World Cup – reportedly earning the club a windfall of $114 million[1] – is the latest reminder that success on the pitch increasingly equates to serious financial reward. This follows Paris Saint-Germain’s (PSG) victory in the 2024/25 UEFA Champions League (UCL) final, which generated over €148 million in revenues for the French club, with runners up Inter Milan taking home just over €136 million.[2] These substantial payouts were fuelled by a significant increase in the UCL’s total prize pool, rising from €2.03 billion in 2023/24 to €2.44 billion for the 2024/25 season.[3] In this context, access to top-tier competitions is not simply a matter of sporting merit - it's a gateway to vast economic opportunity.

It also throws into sharp relief the tensions that have shaped recent governance battles. About four years ago, PSG and Inter Milan found themselves on opposite sides of a different sporting divide - one that threatened the future of the UCL itself. Inter Milan, frustrated by what they saw as an outdated and restrictive regulatory model, were one of several major clubs threatening to break away from the UCL and form the European Super League (ESL), while PSG notably led the backlash against the ESL project. That standoff culminated in a historic judgment from the Court of Justice of the European Union (CJEU) in December 2023 - one that fundamentally altered the legal environment in which sports governing bodies operate.

While there is a long history of EU competition law being applied in a sporting context, the ESL judgment was a watershed moment. It was widely regarded as redefining the limits of sports bodies’ regulatory power. Prior to this ruling, courts had generally recognised a broad margin of autonomy for sports governing bodies, drawing on the principles established in the Meca-Medina case.[4] However, the ESL judgment curtailed the scope of that principle, subjecting sports governing bodies to more rigorous competition law scrutiny. As a result, stakeholders are now in a stronger position to challenge rules they consider anti-competitive, unfair, or lacking in transparency.

In this piece, we examine the evolving post-ESL landscape, review key cases (many of which have followed in its wake), and outline practical steps in-house legal teams can take to ensure that governance models remain resilient in the face of increasing legal scrutiny.

The ESL Judgment: An Inflection Point

Case Summary

The ESL proposal, announced in April 2021, envisioned a closed competition featuring many of Europe’s top football clubs. UEFA and FIFA reacted forcefully, warning that participating clubs and players would face bans and sanctions. The legal battle that followed centred on whether UEFA and FIFA’s ‘pre-authorisation’ rules, which apply to third-parties seeking to set-up new interclub competitions, breached EU competition law.

In its December 2023 judgment, the CJEU ruled that pre-authorisation rules breach competition law if they are not placed within a framework providing for substantive criteria and detailed procedural rules which are suitable for ensuring that they are transparent, objective, non-discriminatory and proportionate, so as to limit the discretionary powers of the governing body. While the ruling did not prohibit governing bodies from enforcing rules to protect the integrity of their sport, it set clear limits on how such rules must be framed and applied.

Key Principles and Takeaways

The ESL case, and the related ISU and Royal Antwerp judgments which came out on the same day,[5] have established core legal principles that all sports governing bodies must now grapple with:

• Transparency and Objectivity: Rules that grant governing bodies broad discretion - particularly over the authorisation of rival competitions - must pursue a legitimate objective and must include clear, published criteria and be applied consistently.
• Proportionality: Sanctions and restrictions must be suitable and no more restrictive than necessary to achieve a legitimate aim. Overly punitive or sweeping rules are unlikely to survive scrutiny.
• Broader Applicability: Though the focus in ESL was on UEFA’s pre-authorisation rules for rival tournaments, claimants have construed the judgment broadly as establishing a general principle that any rule that restricts market access - whether for players, agents, leagues, or commercial partners - is subject to the same requirements.

Key Legal Challenges Since ESL: Pressure Points Emerging

Since the ESL ruling, a series of legal challenges have tested how far competition law can reach into the regulatory frameworks of professional sport. These cases span multiple disciplines and raise similar concerns: whether governing bodies are overstepping by imposing restrictive or exclusionary rules. The table below provides a snapshot of some of the most significant cases – some predating ESL but drawing on similar principles, and others emerging since — each highlighting a different pressure point in the evolving post-ESL legal landscape.

Common Pitfalls for Governing Bodies

These and other recent cases highlight recurring themes that pose legal risks for sports governing bodies:

• Access barriers: Rules that prevent or deter new entrants - whether tournaments, teams, or service providers - must be justified by legitimate objectives and implemented using transparent, objective, non-discriminatory and proportionate criteria.
• Opaque sanctions: Disciplinary frameworks that rely on discretion or lack transparency are highly vulnerable. Consistent application, transparency and robust procedural safeguards are essential.
• Governance conflicts: Structures where regulatory bodies also control commercial rights risk crossing the line into a potential abuse of dominance. Measures to avoid conflicts of interest are essential.

Practical Steps for Sports Governing Bodies’ In-House Legal Teams

The growing volume and variety of legal challenges since ESL underline the importance of proactive risk management. For in-house legal teams at sports governing bodies, this means going beyond reactive compliance and taking strategic steps to future-proof governance structures. The following practical measures ought to help sports governing bodies stay ahead of regulatory scrutiny, safeguard the legitimacy of their rules, and minimise litigation risk.

1. Governance reviews

Audit current rulebooks and governance frameworks through a competition law lens. Prioritise high-risk areas: tournament authorisations, player eligibility, sanctions, and rules which have a direct impact on participants’ commercial freedom.

2. Transparency, consistency and documentation

Ensure that all rules - especially those that restrict participation or impose sanctions - are clearly written, publicly available, and consistently enforced. Avoid opaque and arbitrary decision-making. Maintain internal records of decision-making processes.

3. Stakeholder consultation

Include clubs, players, and third parties in meaningful consultations when developing or revising rules. Consultation improves both the substance and legitimacy of regulations.

4. Early legal and economic advice

Engage legal counsel at the outset when designing rules with potential commercial impact. Commission economic evidence where necessary to examine economic effects (or lack thereof) and proportionality.

5. Litigation preparedness

Monitor ongoing cases in this area and be ready to respond. Build severability into key rules to avoid knock-on effects if one provision is found unlawful. Prepare contingency plans to address potential disruption from adverse rulings.

6. Review jurisdiction clauses and dispute forums

Many sports rulebooks provide for arbitration as the exclusive forum in the event of a dispute. In-house teams should assess whether arbitration remains the most suitable forum for disputes involving competition law. While arbitration can ensure confidentiality, a quick resolution and allows for the selection of arbitrators by the parties, it may limit opportunities to challenge decisions or develop public-facing precedents - particularly in cases involving EU or UK competition law.

Conclusion

Chelsea and PSG’s recent victories remind us just how high the stakes now are in professional sport. Access to elite competitions translates directly into revenue, power, and prestige. It is no surprise, then, that questions over who gets in - and on what terms - are increasingly being fought in the courts.

The ESL judgment has reshaped the legal landscape, and the wave of litigation that followed shows no sign of receding. Sports governing bodies that proactively adapt - by embracing transparency, proportionality, and robust legal safeguards - will be best placed to thrive in this environment.

Our firm regularly advises on these issues across a wide range of sports. We combine deep sector expertise with a practical and commercial approach.