The new rules of the game

The world of sport is flourishing, thanks to a huge input of TV money. But along with the cash come the legal wrangles, opening up a new field of opportunities for barristers wishing to break into the area. Bal Khela reports.

Sport has become a thriving industry with a lot riding on it. Worldwide marketing and the advent of digital TV, the internet, globalisation and mega-sponsorship deals are making it every entrepreneur's dream. Sport, like music, attracts loyal followers who devote their time and money to every facet of their interest and law is playing an increasingly vital part in this prosperous new economy.

A legal framework is becoming more necessary as relationships get increasingly complex and the financial stakes of sporting interests reach record levels. “Sports law is highly lucrative,” says Tim Kerr of 4/5 Gray's Inn Square. Sports sponsorship, for example, increased by 13 per cent to £12.62bn in 1998, according to leading sports publication SportBusiness.

As with music law, new opportunities are emerging for barristers wishing to break into the industry. Vernon Flynn of Essex Court, for example, has recently drafted a contractual agreement for one of the world's leading sports promoters which he claims marks a watershed in terms of sports-related bar work.

There is also a growing number of regulatory bodies used to resolve disputes without recourse to the courts which are providing a useful adjunct to many barristers' litigation practices. Michael Beloff QC of 4/5 Gray's Inn Square, for example, has been appointed a member of the Swiss-based Court of Arbitration for Sport (CAS). This body will be a world arbitrator for the sporting industry. Charles Flint QC of Blackstone Chambers believes that “due to the importance of these panels, it is essential to attract the right calibre of individual” – namely barristers.

Elsewhere, the UK's Sports Dispute Resolution Panel (SDRP) has recently been established to emulate the CAS on a national level. All groups are subject to CAS rulings except football's international governing body Fifa and the world athletics governing body, the IAAF. These powerful quasi-corporate bodies are a new breed and operate across jurisdictions without government intervention or regulation. Kerr says: “These are neither public nor private bodies.”

Both Fifa and the IAAF have recently been the subjects of adverse publicity. Fifa has come under fire after suggestions that bribes and threats influenced the World Cup vote, following the abstention of the New Zealand delegate which led to the 2006 event being awarded to Germany rather than the favourites, South Africa. Although Fifa is refusing to recast the vote, it has vowed to investigate the claims of bribery and intimidation. The South African bid team has even discussed possible legal action against Fifa over the right of delegates to abstain.

The IAAF, meanwhile, has faced criticism over the fairness of its procedures, especially after Jamaican sprinter Merlene Ottey, suspended when she tested positive for the drug nandrolene, was later cleared. However, German athletics chief Helmut Digel has urged the IAAF to prevent athletes who test positive from competing. He has expressed concern about the long delays between positive tests and arbitration hearings. In a Reuters interview, Digel said: “I am not talking about guilt but about fair play. If there is a positive test we must suspend the athlete…This is not a question of public law. This is only a question of sports law.”

Previously, the decisions of sporting bodies were seen as the final word, but Beloff thinks that “nowadays more and more individuals are prepared to challenge decisions”.

He adds: “Sports is where my profession and interests coincide… I could make a reasonable living out of just sports law. I could never have said that a few years ago.”

Strangely, the bar has been slow to take advantage of this growth. But Flint recognises its importance. “An awful lot depends on these cases and one expects income to grow,” he says.

There are no official sports law sets even though there are a number of specialists operating at specific chambers. The leading chambers include three of the magic circle – Brick Court Chambers, Essex Court and One Essex Court – as well as Blackstone Chambers, 4/5 Gray's Inn Square and its former merger partner Monckton Chambers.

The ground-breaking Bosman ruling that allowed free movement of football players across the European Union has also affected rules governing competition.

Other areas of sports law ripe for legal wrangles include contracts, fairness of hearings, disciplinary matters, regulatory procedures, jurisdictional disputes, corruption and ownership of rights, while the internet and other new mediums are already creating further potential areas of conflict. Competition law, in particular, is set for a major role post-Bosman. The Premier League is in the process of redrafting standard player contracts in consultation with managers, the Professional Footballers' Association and other leagues. This includes the negotiation of rights to TV, satellite, radio and internet coverage.

The BBC, which secured rights for the Euro 2000 football championship, was so worried about the successful imitation of live audiences that it brought a doomed action [see box, page 27]. In addition, world governments are opposing the imposition of restrictions on the broadcasting of the Sydney Olympics. US broadcaster NBC has already paid £3.5bn for the rights to broadcast the games but other news agencies are being prevented from reporting the Olympics.

The Olympic authorities are also filing a suit against more than 1,800 'cybersquatters' who have websites using the name Olympia and Olympics.

The issue of rights is pitching fans against the media giants which are dictating the new order. The case of Widnes Rugby Football Club v Rugby Football League is an example of how a small club no longer enjoys an absolute right to participation [see box, page 27].

Competition barrister Nicholas Green QC of Brick Court Chambers says: “Sports will flourish because TV money is now of such an enormous magnitude.” Football has benefited from the boom more than any other sport and the value of TV rights continues to grow. BSkyB has recently negotiated the rights to broadcast live Premier League games for £1.1bn over three years.

“Football is the barometer by which all sports are measured,” says Green. And football commands so much loyalty and devotion that the courts sought to protect the public interest by refusing to revoke TV rights granted to the BBC and BSkyB [see box, page 27].

The future of sports will be defined by the relationship of the organisations and the individuals. The courts and barristers alike must ensure that the rise of sport does not lead to chaos as quasi-corporate institutions, the corporations, the media giants, the players and fans fight for their respective corners.

It is clear that barristers are and will continue to benefit from record growth and the institutions governing the industry will be subject to further scrutiny. The CAS may bring some certainty where there has been chaos but national and European courts must find a balance between global commercial interests, representing the sports stars themselves as well as preserving the interests of the fan who is not yet surplus to requirements.

Significant Cases

British Broadcasting Corporation v Talksport (June 2000)

Court: Chancery Division

Judge: Mr Justice Blackburne

BBC counsel: Geoffrey Hobbs QC and Philip Roberts (both at One Essex Court)

Instructing solicitor: counsel instructed by the BBC

Talksport counsel: Barbara Dohmann QC and Robert Howe (both at Blackstone Chambers)

Instructing solicitor: Herbert Smith

Case: The BBC contended that Talksport had imitated live audiences using ambient sound effects that amounted to passing off. However, counsel for Talksport argued that “live sports broadcasting” had not represented that the sounds were from the stadium, words had no goodwill and that people were aware that Talksport was not the BBC or at the stadium.

Verdict: The use of ambient sound effects did not give rise to a passing-off claim. Permission to appeal was refused.

Widnes Rugby Football Club v Rugby Football League (May 1995)

Court: Chancery Division

Judge: Mr Justice Parker

Rugby Football League counsel: Michael Beloff QC and Tim Kerr (both at 4/5 Gray's Inn Square)

Instructing solicitor: Herbert Smith

Widnes Rugby Football Club counsel: John Martin QC (Wilberforce Chambers)

Instructing solicitor: Cuff Roberts

Case: The Rugby Football League proposed to introduce a new competitive league by striking a broadcasting rights deal with Rupert Murdoch. Widnes were not offered a place in the new league because of their poor performance but they argued that they had a contractual right to join the new competition by virtue of their membership of the league and sought an injunction against the league.

Verdict: The injunction was refused because Widnes failed to show that the league had acted outside its rules in adopting a structure for the new competition. Permission to appeal was refused.

Director General of fair trading v Premier League, BSkyB, BBC (July 1999)

Court: Restrictive Practices Court

Judge: Judge Ferris

BSkyB counsel: Nicholas Green QC and Jonathan Sumption QC (both at Brick Court Chambers)

Instructing solicitor: Herbert Smith

Premier League counsel: Charles Aldous QC (7 Stone Buildings) Catharine Otton-Goulder (now a QC, Brick Court Chambers) and Richard Fowler QC (Monckton Chambers)

Instructing solicitor: Denton Hall

BBC counsel: Christopher Carr QC (One Essex Court) and Rhodri Thompson (now at Matrix Chambers)

Instructing solicitor: Richards Butler

Director General of Fair Trading counsel: Geoffrey Vos QC (3 Stone Buildings), Kenneth Parker QC, Jon Turner and Daniel Beard (all at Monckton Chambers)

Instructed by: Treasury Solicitor

Case: The Director General of Fair Trading (DGFT) challenged the exclusive broadcasting rights granted to BSkyB for Premier League football. The DGFT alleged that the clubs should be able to license their own rights individually. He also alleged that the BBC should not be able to have the rights to Match of the Day.

Verdict: The court rejected all of the DGFT's case and held that the granting of the rights to BSkyB was in the public interest. The case was one of the last to be heard under the Restrictive Practices Act 1976. It was reputed to be one of the most expensive cases ever pursued by the DGFT. The DGFT did not seek permission to appeal.

Ooh, ah cantona!

The image rights of professional footballers include the player's face, name, any nickname, his signature, voice and any other physical aspects. Arguably, one of the most famous footballing images is that of Eric Cantona, who was known for wearing a shirt with a number 7 on the reverse. Unlike in a number of European jurisdictions and the US, English law has no specific protection for these images or personality rights and the use by others of a player's facets for their own commercial exploitation and advantage.

Until the Trade Marks Act 1994, the protection offered to sporting personalities was effectively limited to the tort of passing off. A well publicised case is Halliwell v Pannini, in which the Spice Girls applied for an injunction to prevent Pannini from distributing a sticker collection showing a picture of the Spice Girls. The band argued that because the cover of the stickers did not state that it was not authorised by them, the general public would be misled into believing that the Spice Girls had authorised the collection. The group admitted that it would not have complained if the sticker packet had been marked “unofficial”, because they had not previously complained about other items branded as unofficial Spice Girls products.

The judge made it clear that he did not expect the band's case to succeed at trial. In his view, the general public would not think the stickers were authorised by the Spice Girls simply because the word “unofficial” did not appear. On other Spice Girls' products, the word “official” did not appear and the judge suggested that the question of products being official or unofficial was not relevant to the purchasers.

Against this background, it seems that actions for passing off involving merchandise featuring the images of players and performers are likely to succeed only if there is something about the product which appears to suggest that the player had endorsed the product, otherwise confusion of such endorsement is extremely likely. Even then, the player or the performer will need to establish a common field of activity or trade in which he and the defendant are engaged, and this may be difficult.

Since the Trade Marks Act 1994, players would now be best advised to seek registering trade marks. It is not possible to have copyright in a name, but Section 1 of the Trade Marks Act 1994 has lent assistance to players and sporting personalities. It defines a trade mark as any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of another undertaking. It then goes on to state that a trade mark may, in particular, consist of words (including personal names), designs, letters, numerals or the shape of goods or their packaging. Compare this to the wording of the Trade Marks Act 1938 and it can be seen that the latest act would appear to enable a far greater range of signs and marks to be capable of registration. This can be seen with the registered trade marks of the phrase “Ooh, Ah Cantona!” on the reverse of Cantona's shirt with a number 7, as well as Ryan Giggs and the number 11.

The general need for such image protection has been highlighted recently with the registration by third parties of internet domain names, including the names of well-known players such as David Beckham. Where the domain names infringe a registered trade mark, the player can seek redress in the courts. However, where that is not the case, if players have wished to set up their own websites using the domain names already registered, they have often been held to ransom to buy their name back. For many players, their own website would be little more than an information service. However, for those with high profiles, it is likely that they will wish to use such a vehicle for commercial purposes, either for the sale of advertising or for licensed merchandise. While there are now procedures enabling such registrations to be challenged, and indeed a Dutch court last week ordered a company to return registrations to, among others, footballers Dennis Bergkamp and Patrick Kluivert, this has otherwise proved yet again the need for specific individual image protection.

As can be seen, in English law there is still some way to go to protect the image rights of players, particularly if the player does not himself engage in any commercial activity. Even in the case of a player who has registered trade marks, it is vital that those trade marks are used if they are not to be challenged. It remains to be seen whether English courts are prepared to consider an actual passing-off allegation where all that is at stake is the potential to license the player's image rights.

Scott Duxbury and Jason Smith are solicitors at James Chapman & Co.