Brussels, Feb. 26 2001: Below you will find some highlights of the speeches by Max Mosley, president of the Fédération Internationale de l'Automobile (FIA), who expressed his views on governance of motor sports and European Commissioner for competition, Mario Monti, explaining competition and sport: the rules-of-the-game.
During the first International Governance in Sport Conference in Brussels, Belgium, one of the keynote speakers was Max Mosley. He was sitting in the panel alongside of Mario Monti.
Max Mosley's presentation dealt with topics on how to govern motor sport. He made, amongst others, the following interesting statements, which will for sure cause a lot of reflection in the motor sport communities:
1. What is the purpose of a motor sport body?
The body should agree on and enforce rules, encourage and promote its sport, ensure fairness and safety.
2. Is a motor sports body really like a company?
No. It does not exists to make profits [note:then quite some delegates started laughing]. It typically has no paid directors whose job is to make profit. It does not compete with other bodies in the same sport. It exists to further a common interest and has its own rule enforcement system.
3. Are governance rules relevant to motor sport?
Sport has a democratic structure, but who should vote? Do public interest and participant interest become the same? Should the law interfere?
4. Should a motor sport body be a money maker or pure regulator?
Mosley did not make a choice here but just raise some more questions, such as:
* if a money maker, who supervises the use thereof;
* if a money maker, how to deal with laws which are against business monopolies, if the sport has a monopolistic structure?
* if a pure regulator, should it fall outside the scope of competition laws?
5. Common principals for sport governance should be agreed
Mosley concluded his speech that those principals should reflect the following:
* democratic structure at all levels
* transparency
* avoidance of conflicts of interest
Commissioner Monti devoted a lot of elements of his very interesting speech also to motor sports.
It is therefore that motorsportlaw.org reflects main discussion points on this web site for the benefit of its readers.
Mario Monti made the following statements:
1. Sport is subject to the rule of law.
This is the starting point of the Commission and its is -or must be- the same for all sporting authorities. The rule of law should be considered as a basic and fundamental principle for sport.
2. Sport is in its economic aspects also subject to Community law.
The Court of Justice has rules on several occasions that sport is subject to Community law in so far as it constitutes an economic activity.
3. Competition rules are there to make sure that there is a playing field for everyone in the market of sports.
Agreements, decisions or practices by or between international federations and national governing authorities may be caught by these rules. However, this only applies to the economic activities generated by the sporting activities whereby the differences how competition works in the sport arena compared to other economic sectors should be taken into consideration.
In plain words: the aim of the game is not to eliminate the weaker competitor but to attract spectators' interest. Contest is the raison d' etre of sports. The results of the sporting event should be as uncertain as possible. Competition under equal circumstances is what counts.
Monti highlighted in this respect the Deliège judgement, which is of crucial importance for the application of selection criteria by governing sporting authorities.
The Court of Justice ruled that selection criteria applied by a federation to authorise the participation of professional or semi-professional sporters in an international sports competition inevitably limit the number of participants. However, such a limitation does not in itself restrict the freedom to provide services, if it derives from an inherent need in het organisation of the event concerned.
4. Redistribution of financial resources to -for example- lower levels of the sport concerned may be justified if they are necessary to preserve sport's essential social and cultural benefits.
The Commission recognises that youngster should be promoted. that's a legitimate aim.
5. The Commission has actually 70 sport related competition cases at hand.
Some examples:
A. THE QUESTION OF A SINGLE FEDERATION PER SPORT.
This becomes critical especially if regulation and organisation is being vested in a single body, because this leads to significant conflicts of interest.
The Commission is looking carefully at whether another scenario should be required.
In this regard, Monti explained why the FIA had to divest its commercial interest in Formula One (to companies associated with Mr Ecclestone). At the same time the FIA strengthened its rules to ensure that all potential motor sport organisers and participants are treated equally. these measurements seems sufficient in principle to meet the competition objection raised.
within short, the Commission will publish a Notice inviting interested third parties to make known their views on these revised arrangements.
B. THE QUESTION OF CROSS-OWNERSHIP OF TEAMS
To ensure integrity of a competition appears legitimate. Rules to forbid such cross-ownership will in principle fall outside the scope of the competition rules.
C. THE QUESTION OF TRANSFER RESTRICTIONS OF SPORTERS
As this is not a common practice within motor sport, motorsportlaw.org leaves this issue aside.
D. THE QUESTION OF RESTRICTIONS RESULTING FROM SPONSORSHIP CONTRACTS
Exclusive rights should only be granted in a transparent (e.g. by means of tendering procedures) and according to objective selection criteria.
E. THE QUESTION OF HOW TO DEAL WITH BROADCASTING RIGHTS
In the FIA case, the Commission's concern was that the FIA used its regulatory power to determine the owner and the manager of valuable broadcasting rights. This created a strong monopoly. The FIA accepted the Commission's views that such commercial issues should be dealt with by negotiating with all interested parties rather than by imposing rules.
The granting of exclusive contracts for a sporting event or for one season in a given championship do normally not pose any competition problem. However, exclusivity of a long duration and for a wide range of rights is unacceptable, because it likely leads to market foreclosure.
F. THE QUESTION WHETHER THERE IS ROOM FOR SELF-REGULATION
Sporting authorities need to adapt to their new environment, in order to avoid competition complaints. Modern rules or governance are necessary to change the outdated monopolistic attitudes and modify old customs.
Motorsportlaw.org is of the modest opinion that these two, partly opposite, speeches provide an interesting framework for improving the governance of motor sport, both on the international and national level.