It is with much pleasure that we welcome readers to the December 2017 edition (citation: GSLTR 2017/4) of our ground-breaking journal (www.gsltr.com), a very useful resource: Global Sports Law and Taxation Reports (GSLTR).

2017 has thrown up a wide range of sports legal and sports tax issues, of which mention may be made of some of the highlights of them as follows.

Once again, association football (soccer) has dominated the sporting legal and tax headlines during the past year. The 2017 Summer  “transfer window” saw the world record transfer fee of US$ 263 million – almost double the previous world record – being paid for the move of Neymar Jr. from FC Barcelona to Paris Saint-Germain FC. This has provoked some controversy and UEFA are investigating whether this transaction is compliant with their Financial Fair Play Rules.

Again in 2017, the taxation of sports image rights has occupied the attention of tax advisers and tax authorities alike, culminating in a € 15 million tax fraud case brought against the Real Madrid forward, Cristiano Ronaldo, who is reputedly the highest paid athlete in the world, in relation to the commercial exploitation of his image rights.

Also, the FIFA world bribery scandals rubble on and the first of the 42 people and entities involved in the US investigations into them has been sentenced by a New York Court – others will follow.

E-Sports has continued its inexorable rise in popularity and value in 2017, including the launch of the Formula One E-Sports Series, and is well on its way to becoming an Olympic sport in the foreseeable future! Perhaps debuting in the 2024 Paris Olympics?

Doping has also grabbed the headlines again, including a controversial proposal for the microchipping of athletes in the continuing fight to catch drugs cheats and bring them to justice; and also a legal claim brought in the Canadian courts by three Russian road cyclists against WADA and Prof. Richard McLaren arising out of his report on the alleged Russian athletes’ systematic doping claims.

In the sports broadcasting field, 2017 has seen the further expansion of the IOC multi-platform Olympic Channel, which was launched on 21 August 2016 at the closing of the 2016 Rio Summer Olympic Games, and also a review by the UK Competition and Markets Authority of Rupert Murdoch’s bid to acquire the rest of Sky, a significant sports broadcaster in the UK, the completion of which has been delayed, if not put in jeopardy.

And, at the time of writing, the Paralympian athlete, Oscar Pistorius has had his sentence doubled by the Appeal Court in connection with the killing of his girlfriend!

Turning now to the articles. In this issue, on the sports legal side, we feature an article on an ever-green topic,  “ambush marketing “, in which Stefan Fabien reports on the steps being taken in the Caribbean, which hosts a number of regional and international sporting events, to fight this phenomenon. In his article, he reaches the following conclusions:

The Caribbean experience in combatting “ambush marketing” is similar to that of many other countries. The main difference is that the majority of these Caribbean economies are beginning to diversify into the very lucrative market of sports tourism. As such, they will be very eager to put in place whatever necessary legislative provisions are required to provide title sponsors of major sporting events with the comfort of hosting a tournament in their backyards.

To the traditionalists, who fear a loss of the Caribbean sporting experience that they grew up loving, the stark reality is that large professional sporting events cannot take place without the infusion of sponsorship investment and, when businesses sponsor an event, they want to be assured that the organizers protect their exclusivity, so they get maximum value for their investment.

[…] It is likely that anti-ambush marketing legislation will become, more and more, a recognisable feature of sporting tournaments in the Caribbean, as the islands vie to stay competitive. At the time of writing, many such islands have been ravaged by an unforgiving hurricane season and will, therefore, require any and every advantage for their heavily tourism-dependent economies.”

We also include an article by Vassil Dimitrov on another perennial sports law issue, namely, match-fixing in football – this time in Bulgaria. In his introduction, he comments as follows:

To fight match-fixing in sport requires the criminalisation of the acts that are harmful towards the social relations associated with sporting competitions governed by the respective sports federations. Crimes against sport threaten not only the normal and lawful conduct of the sporting competitions, but also reveal a high degree of social danger, which threatens the integrity of sporting events and violates the fundamental principles of sports law: the prohibition of any unsporting advantage and also the principle of fair play.

These crimes cause significant damage to the sports federations, their members, the clubs and also the players. Match-fixing has become one of the main issues which has placed a black stain on modern football. It is often linked with illegal betting activities and organised criminal groups for manipulating the development and the outcome of football matches.

And in his article, he goes on to examine and comment on some recent cases of football match-fixing in Bulgaria, including the imposition of suspended sentences, reaching the following conclusions:

The Bulgarian jurisprudence related to sports crimes is still too modest to determine any consistent trends; but, in any event, imposing more severe punishments could lead to the prevention of such crimes, especially in cases of manipulation of matches which are part of gambling games organised by bookmakers, and also in those instances where more than one aggravated circumstance applies.

The right balance, when applying the criteria for imposing suspended sentences for match-fixing in football, could prove to be the biggest challenge facing Bulgarian judges when ruling on similar cases in the future!

On the subject of crime and sport, again in relation to football, we also publish an article by Steve Mould, Head of Criminal Law at VII Law in London. In his article, he endeavours to answer the question whether the Criminal Law should have any place on the sports field, and, if so, to what extent. He concentrates on violence on the football pitch and on whether the leading English Court of Appeal decision in R v. Barnes has clarified or confused the Law on this subject, particularly in relation to the defence of consent.

He reaches some general conclusions as follows:

As we have seen, the application of the Criminal Law to sport is problematic and, notwithstanding the guidance given in the leading English Appeal Court case of R v. Barnes, some “grey areas” still remain and need to be clarified.

However, what can be said with some certainty is that each case of violence on the football field needs to be considered on its own particular facts, circumstances and merits when deciding whether or not a criminal charge should be brought and also its likely outcome. Further, the view of the referee will be an important consideration in determining whether criminal charges should be brought against the “offender”. Also, the views of past and present players will need to be taken into account and given in evidence in any resulting criminal proceedings.

[…] Of course, in all these cases, it may be difficult to prove intent – “mens rea” – whilst the wrongful act – “actus reus” – is usually there for all to see! It will be remembered that both elements need to be established and proved to constitute a crime.

Again, the English Law Commission […] have looked into the matter, may need to take another look at this controversial area of the Law and determine what role and to what extent the Criminal Law should intervene in the field of sport and, not least, in the case of football, which is the world’s favourite game and followed by millions of fans.

We also publish three articles with a common and important theme running through them, namely the independence and transparency of sports’ governing bodies.

In the first article by Juan de Dios Crespo Pérez and Paolo Torchetti, entitled “Legal foundations of sports federations and the Court of Arbitration for Sport: Increased transparency as a tool to pursue institutional independence“, the authors point out in their introduction that:

As the CAS case load has grown, so too has the complexity of the legal landscape underpinning the open system of the international sport world pyramid. One of the more vital issues that the CAS has had to deal with, during this period of growth, is that of institutional independence from some of the larger international sports federations (IFs) that have supported the centrality of the CAS in the sports law world, such as the IOC and the Fédération Internationale de Football Association (FIFA). […] The issue of independence has again reared its head as the Pechstein series of cases have raised some of the same arguments that have been articulated over the course of the past 30 years or so.

To increase such transparency, the authors propose in their article certain amendments to the CAS Code of sports-related arbitration. These involve the composition of CAS arbitration panels and the disclosure of links to IFs; the publication of CAS awards; and the holding of certain types of hearings in public.

Crespo Pérez and Torchetti go on to reach the following main conclusion that:

“[…] the pursuit of absolute transparency in CAS appeal proceedings is necessary. The public interest functions pursued by IFs, where the CAS is the gatekeeper of the decisions of those organizations, from a policy perspective ought to supersede any competing interests. It is possible that such changes would require a paradigm shift in mentality on behalf of IFs to accept such a system. Considering that IFs are the “world governing body” of their respective sports and pursue the public interest, the authors of this article are hopeful that they would be magnanimous in their approach and agree to complete transparency in CAS proceedings.”

In the second article, Dr. Thilo Pachmann and Oliver Schreier, pose the question:  “Are sports’ governing bodies above the law?“ In their article, the authors analyse the legal structure applicable to sports’ governing bodies in Switzerland, where many of them are based, and, in the light of that analysis, consider whether these bodies are kept in check through judicial review by the CAS and the Swiss Federal Tribunal.

They finally answer the question in the affirmative in the following terms:

Given the legal concept of the one (and only) independent judicial entity capable of reviewing the decisions of sports’ governing bodies and the lack of a realistic possibility to appeal any decisions before the Swiss Federal Tribunal – a problem which is even magnified when the CAS Panel makes use of its de novo powers – it can be argued, with good reason, that sports’ governing bodies are, in fact, above the law.

The third article is by Prof. Dr. Ian Blackshaw in which he considers the role and powers of sports’ governing bodies and reaches the following conclusions:

“[…] sports’ governing bodies jealously guard and defend their autonomy and powers to organise their own affairs without any outside interference of any kind, including national governments and reviews of their activities by the ordinary courts.

However, […] there are, in fact, some legal limitations on their autonomy and powers in that they may not oust the jurisdiction of the courts in all cases, not least, where there has been a breach of the “rules of natural justice” or of their own rules or where their own adjudication procedures are found to be wanting in other respects to such an extent that a just and fair outcome for the claimant is not possible outside the courts. There is always a “public interest” or “public policy” element to be satisfied.

Of course, sports’ governing bodies always claim that they are in the best position to determine sports disputes and there is some sympathy for this point of view shown by the ordinary courts, which, in general, are reluctant to get involved in such cases.

Sports’ governing bodies also argue that sport is “special” with its own particular characteristics and dynamics and, as such, should be outside the normal legal system. And they support this contention by pointing to the fact that the Court of Arbitration for Sport (CAS) is, after its thirty-three years of operations and currently registering between four and five hundred cases a year, proving, in practice, to be a fair and effective body for settling, in a timely and relatively inexpensive manner, a wide range of sports-related disputes […].

This latter claim is difficult – if not impossible – to refute, but, of course, a proper balance needs to be struck between the roles that should be played by sports’ governing bodies and by the courts, which, ultimately, it is submitted, are the guarantors of the rights and freedoms of all enjoyed in a free and democratic society!

Turning now to the sports tax side, we include a timely article by Kevin Offer on further developments in the taxation of sports image rights in the UK following the recent publication of the so-called Bermuda “Paradise Papers”. As he points out in his article:

“[…] in the current climate where, in the UK, the distinction now appears to be drawn between tax planning and tax avoidance, rather than avoidance and evasion, tax authorities and governments are under increasing pressure to clamp down on what was previously considered to be acceptable tax planning.

He goes on to explain the current thinking on the part of the UK tax authority, HMRC (Her Majesty’s Customs and Revenue), in relation to the commercial exploitation of sports image rights, as set out in their latest Guidance, which was published on 16 August 2017, and provides the following pertinent advice:

Any club or player in the UK, or a player considering a move to the UK, would be advised to take advice on any image rights arrangements that they have in place to ensure that they are on a commercial basis, taking into account HMRC current guidance.

We also publish an article by Dr. Dick Molenaar, a regular contributor on tax matters to GSLTR, on the highlights of the Seminar on the International Taxation of Sportsmen and Entertainers, organised by the Tax Policy Center of the University of Lausanne and held on 22 September 2017. Amongst other current sports tax policy issues that were covered at the Seminar was the taxation of sports image rights and, in particular, the valuation of them. This topic was presented by Emmanuel Linares, His starting question was: “What is the value of the image rights of a young football player?”

As was pointed out, even though Emmanuel Linares is not a tax expert, but an economist, he also understands that this is important, because a sportsperson or entertainer wants to transfer his image rights to a separate limited company, when possible, preferably resident in a low-tax jurisdiction. With the transfer, the sportsperson or entertainer hands over the image rights to the limited company and this needs to be done at an arm’s length price. This price will be lower when the sportsperson or entertainer is younger and not yet successful and will become higher when his/her career develops.

Linares gave information about available statistics, especially for football players, such as wins and losses, goals, passes completed, tackles, throw-ins, speed and distances, injuries, and noted that these can be interesting in determining the value to be placed on a player for image rights purposes.

We also include a contribution on Turkey by Dr. Z. Ertunç Şirin, of the Istanbul University Faculty of Law, and Metin Abut, Associate of Moroğlu Arseven, as part of a comparative survey of the tax implications, in a number of countries, arising from the international transfer of professional football players.

As mentioned in the general introduction to this survey:

An international transfer of a football player from one professional club to another may cause various financial streams with specific tax ramifications with sometimes doubtful solutions. The purpose of this comparative survey will be to analyse the most common tax ramifications and how these are dealt with in the national systems of several countries. The survey will cover the tax treatment of the income paid to the player and other payments, such as agent’s fees or commission fees, from the point of view of the player and agent. There may also be consequences for other parties involved, for example, parties owning part of transfer rights, etc.

Finally, we round off the December 2017 issue of GSLTR with two further contributions to the above comparative survey on the taxation of international transfers of professional football players in respect of The Netherlands by Cees Goosen and Wim R.M. Nan of Loyens Loeff, Amsterdam; and in respect of Italy by Mario Tenore of Maisto e Associati, Milan.

So, another year is coming to an end and, as noted above, has brought with it its own veritable crop of interesting and significant developments in sports law and sports-related tax law. No doubt, the New Year will also be full of other challenging sports legal and tax issues, which will keep sports lawyers and sports tax advisers well and truly – metaphorically speaking – on their toes!

We should mention that many of this year’s legal and tax developments have been covered on our dedicated website (www.gsltr.com), including the bitter feuding that has been raging in the highest echelons of the International Boxing Association (AIBA), both in and out of court, which has finally been settled out of court, and also in our journal, which all goes to show the need for it. We hope, therefore, that existing subscribers will spread the word about GSLTR, amongst their colleagues and contacts, to encourage new subscribers and thereby help us to increase our global footprint and continue to provide a must-have resource and service for the international sporting community and their legal and tax advisers.

Finally, and as always, we would welcome and value your contributions in the form of articles and topical case notes and commentaries for our journal and also for posting on the GSLTR dedicated website at www.gsltr.com. A number of you have already responded to this invitation, but, as they say, the more of you who do so, the merrier!

So, now read on and enjoy this information-packed December 2017 edition of GSLTR and we take this opportunity of wishing all our existing and new readers our sincere compliments of the season and also all the very best in their sporting endeavours in 2018!


Dr. Rijkele Betten (Managing Editor)

Prof. Dr. Ian S. Blackshaw (Consulting Editor)


December 2017