UKAD

UK Anti-Doping (UKAD) is the national anti-doping association in the UK and is responsible for producing regulations (UKAD Regulations) that comply with the World Anti-Doping Code (WADA Code) and implementing those at national level.

The UKAD Regulations often serve as a template for sports governing bodies in the UK to adopt for their particular sport. Many simply adopt them entirely whilst higher profile sports such as football or cricket amend them, in consultation with UKAD, for their own specific needs.

Participants in any sport will be required to comply with both UKAD Regulations and those produced by their own sport. UKAD is also responsible for carrying out testing, managing results and presenting cases regarding many of the alleged breaches within UK sport.

WADA

A new version of the WADA Code came into force on 1 January 2021, meaning that all sports have been required to review and update their own rules to ensure compliance.

One of the changes is the approach to recreational substances (eg, cannabis and cocaine) where significantly lower sanctions are now possible if the athlete can demonstrate the usage was recreational and out-of-competition. Athletes with an existing sanction for use of recreational substances may be entitled to a review.

Doping is not a criminal offence in the UK. However, certain substances that appear on the prohibited lists are criminalised, such as cocaine.

A British athlete, Chijindu ("CJ") Ujah’s positive result for banned substances Ostarine and S-23 at the Tokyo Olympics reinforced principles of strict liability. As a relay athlete, his offence led to Team GB being stripped of the silver medal and the three innocent members of Team GB’s 4x100m men’s relay team also losing their medals.

Integrity

Integrity is a broad concept within UK sport. Anti-doping and anti-corruption issues (such as match-fixing) are high-profile but the concept also captures governance (see further 4.2 Corporate Governance), safeguarding, athlete welfare, disciplinary issues and social media.

Match-Fixing

Sports governing bodies should now be proactive in dealing with their integrity issues. To take match-fixing as an example, we would expect:

• sports to implement specific anti-corruption regulations which participants are contractually committed to abide by;
• for such regulations to deal with the investigation and prosecution of alleged match-fixing offences by a dedicated body;
• an independent judge to ultimately decide whether an offence was committed and award the appropriate sanction (lifetime bans in serious cases);
• close collaboration with betting operators through memorandums of understanding to ensure relevant data is shared that might evidence fixing; and
• incorporation (where applicable) of global codes such as the Macolin Convention (signed by the UK in 2018 but not yet ratified) and the Olympic Movement Code on the Prevention of the Manipulation of Competitions.

Depending on the specific facts, integrity rule infringements can also constitute criminal offences, such as fraud, as was the case when a number of Pakistani cricket players were given prison sentences ranging from six to 32 months for spot-fixing during a test match played in England in 2010. In such circumstances, sports governing bodies need to liaise with the criminal authorities to ensure neither set of proceedings are prejudiced.

Applicable Law

Certain integrity offences are captured under UK law (such as the Fraud Act 2006 or the Bribery Act 2010). However, prosecution relies on law enforcement having the resources and interest to investigate and this is not always the case, particularly if there is an international element.

Sports Governing Bodies

Whilst it is not illegal, sports governing bodies in the UK are mindful of the potential conflicts of interest if a participant is known to be betting on their own sport. It raises suspicion that the participant has some kind of inside information regarding the outcome of the event in question or, worse, could influence a result.

Whether or not that is the case, sports governing bodies wish to avoid any suggestion of a lack of integrity in their sport. As a result, a sport’s regulations will often prohibit participants from betting on their own sport, usually on a very broad level, and are subject to sanction in the event of betting breaches.

Gambling Act

The Gambling Act 2005 requires information sharing between sports governing bodies and betting operators and other stakeholders in the gambling industry. In addition, specific information sharing arrangements are often put in place to allow governing bodies to be aware of, and respond swiftly to, any concerning betting. The UK government has announced a formal review of the Gambling Act 2005.

Sanctions

Despite the longstanding regulation, participants are still regularly sanctioned for betting-related offences – for example, in December 2020, footballer Kieran Trippier received a ten-week playing ban and a GBP70,000 fine for passing on confidential information regarding a potential transfer.

Sponsors

There is increasing scrutiny as to the appropriateness of betting operators sponsoring professional clubs or events – currently an important stream of revenue for sports in the UK (see further 2. Commercial Rights).

Sporting Regulation

Sports governing bodies in the UK will provide for disciplinary proceedings as part of their regulations where an athlete is alleged to have committed anti-doping, betting or other integrity offences as well as on-field offences.

The athlete provides their contractual agreement to any relevant regulations as a condition of their participation in the sport. Employment contracts with clubs (see 7. Employment) will also require adherence to the regulations.

These disciplinary proceedings will tend to be before tribunals or judicial bodies that are administered internally by sports governing bodies, albeit that the judges should be independent of the governing body (for example, the FA’s Regulatory Commission).

Smaller organisations may elect to provide for external independent tribunals such as Sport Resolutions to both administer their proceedings and provide the judges.

On-Field/Off-Field Offences

There is a distinction between disciplinary proceedings related to on-field offences and off-field offences in the UK, as follows:

• on-field offences – sports organisations usually have wider discretion and can render decisions very quickly with no external involvement;
• off-field offences (such as the betting offences described in 1.3 Betting) – it will take longer for such cases to be investigated, proceedings to run their course and decisions to be made; decisions will usually be appealable to an independent body, such as Sport Resolutions panels or the Court of Arbitration for Sport.

Aside from sponsorship and broadcasting rights (see further 2.2 Sponsorship and 2.3 Broadcasting) and exploitation of data rights (see further 5.5 Sports Data), there are a number of other commercial rights across the sports landscape in the UK, including merchandising, ticketing and hospitality and “official supplier” rights (where the sponsor becomes the official supplier of a product or sponsor to the team or club).

Merchandising

Rights-holders, such as sports teams and event organisers, often seek to exploit the goodwill in their brand by selling branded merchandise. To do this, rights-holders typically enter into licensing arrangements, pursuant to which a licensee (or sub-licensee) is granted the right to design, manufacture and sell a specific range of products that incorporate the rights-holder’s intellectual property in exchange for paying the rights-holder a licence fee and royalty of the licensee’s sales.

Ticketing Income

The ability to sell tickets to an event remains a cornerstone of the potential revenues for sports rights-holders in the UK. While fans were allowed back into stadia during the summer of 2021, with live sporting venues no longer facing any restrictions on fan attendances, loss of ticket income during the COVID-19 pandemic has been felt the most by teams and sports that do not benefit from significant broadcasting income.

Secondary Ticketing Platforms

Where ticket-holders are able to resell tickets to an event, the Consumer Rights Act 2015 provides that online secondary ticket platforms must provide the buyer of the resold ticket(s) with the information on the seat they are purchasing.

If these tickets are resold without the consent of the relevant organiser of the event, the available information on the platform enables the event organiser to identify the original purchaser and, in turn, this assists them in bringing claims against such offenders.

Recent legislation bans the use of automated software by ticket touts to purchase a number of tickets in excess of the permitted number. In August 2021, the Competitions and Market Authority called for stronger laws to tackle illegal ticket resale, by notably increasing the liability of ticket resale websites.

Hospitality

Hospitality can also provide a substantial source of income to sport venue owners in the UK. Significant hospitality offerings (including fine dining, tickets and player meet-and-greets) are now built into stadia and on land controlled by sports rights-holders, wresting much of this income from unofficial providers. By way of example, Tottenham Hotspur FC’s new stadium was designed and built with tailored luxury hospitality facilities, various hospitality lounges and approximately 8,000 of the 62,850 seats in the stadium being premium hospitality seats.

Brand Association with Sport

Sport has an emotional and commercial appeal that companies frequently look to leverage to promote their own brand. Rights-holders in the UK are aware of the potential value that their association brings and are increasingly sophisticated about the way they target potential sponsors, either directly or by using a specialist agency.

Depending on the nature of the rights-holder, its assets and number of interested sponsors, it may be able to sell different sponsorship packages relating to specific competitions or events, specific territories or simply different levels of rights and access. In recent years, the use of data has become increasingly important to the valuation and activation of sports sponsorships in the UK.

Key Contractual Terms

Aside from a clear articulation of the sponsorship rights being granted, some of the key terms in a typical sponsorship contract include:

• the scope of exclusivity for the sponsor;
• the applicable sponsorship fees and any other value-in-kind consideration;
• controls over the use of the rights-holder’s intellectual property (eg, approvals); and
• any post-termination rights the sponsor will be entitled to, including any matching rights and/or right of first refusal. 

Given the difficulties posed by the COVID-19 pandemic, rights-holders and sponsors alike are paying more attention than ever to what contractual provisions should apply if sponsorship rights are not delivered. In the light of recent events in Ukraine, rights-holders are revisiting the importance of termination and suspension rights. In particular, the ability to terminate for reputational reasons.

Traditional Sport Broadcasters

Broadcasting rights have become arguably the most important set of commercial rights within UK sport over the last 20 years. For TV companies such as Sky, BT and ITV, live sport remains one of the few types of content that has bucked the trend of declining viewing figures in recent years. As such, sport is often the cornerstone of their lucrative subscription packages and helps to drive significant advertising revenues.

Broadcast Rights

In return, sports rights-holders have benefited from exponential growth in the value of their broadcast rights. For example, the domestic broadcast revenues earned by the FA Premier League have risen from GBP191 million earned during the 1992–93 to 1996–97 period to approximately GBP5 billion due to be paid in the shorter 2019–20 to 2021–22 period, albeit the most recent domestic rights cycle resulted in a small decrease in revenues. In light of the potential for a further devaluation of domestic rights for the 2022–25 cycle, the FA Premier League received government authorisation (with broadcasters’ approval) to bypass the tender process normally used and simply roll over the rights from the previous cycle at the same fee.

This exceptional rise in value has made it very difficult for terrestrial broadcasters to compete. However, the Broadcasting Act 1996 still requires certain “crown jewel” events, considered integral to British culture (eg, Wimbledon), to be shown on terrestrial TV. This legislation has a depressing effect on rights values given only terrestrial broadcasters can bid.

Non-traditional Sport Broadcasters

Digital companies and content platforms such as Amazon, YouTube and Facebook are also increasingly active in the sports broadcasting space, whether through live rights, highlights and/or associated entertainment content such as documentaries. They have different motivations and commercial models to the traditional pay-TV broadcasters, which impacts the type of rights they acquire and the price at which they do so.

Intellectual Property

In relation to the contractual arrangements between rights-holders and broadcasters, the relevant sporting league or event organiser typically grants a licence to the broadcaster(s) to access the relevant venue (and thereby create the broadcast).

Ownership of the copyright in the images of the broadcast itself will automatically vest in the producer/director of the footage under the Copyright, Designs and Patents Act 1988 and so the relevant contract usually assigns such copyright to the sport event organiser, which licenses it back to the broadcaster so that it may be broadcast in a specific territory.

Hosting, Attendance and Participation

Presently, there exists no proprietary rights in a sports event in the UK. Instead, sports events are primarily protected by the commercial contracts that control the various rights attached to the event and the access to the relevant venue.

For example, the organisers of sports events may enter hosting or participation agreements with venues, teams and athletes and issue tickets to spectators that include specific restrictions (eg, to limit sharing of footage from the event and re-selling their tickets to third parties). See also “ticketing” in 2.1 Available Sports-Related Rights. 

Structure and Organisation

The structure of sports events will depend on the governance of the specific sport. In UK sports, the national governing body of the relevant sport will often be the organiser of competitions within that sport – where this is the case, the relationship between athletes/sports clubs and the governing body will be regulated through the governing body’s rulebook or participation agreement.

In instances in which the competition organiser is not the governing body (eg, the Premier League in English football), a shareholder model can be used to enable the competition’s participants to take decisions collectively in relation to the competition’s rules, commercial arrangements and so on.

Duty of Care

In the UK, event organisers owe a duty of care to take reasonable steps to prevent injuries to people at their event and provide access to proper medical equipment and treatment should they become injured. Should this duty of care be breached, event organisers may be liable on the grounds of negligence. Two primary pieces of legislation that deal with the applicable civil liability of event organisers in the UK are the Occupiers’ Liability Acts 1957 and 1984.

It is rare for athletes themselves to be deemed liable to spectators (since spectators are generally treated as having consented to being at risk of reasonably foreseeable events).

Safety

Legislation has been introduced to increase the safety of sporting events and reduce the risk of public disorder – for example, the Criminal Justice and Public Order Act 1994 made it illegal to stand at specific football matches.

The Safety of Sports Grounds Act 1975 also makes it a criminal offence for event organisers to admit spectators into sports grounds without a safety certificate from local authorities if the ground can accommodate more than 10,000 spectators (or more than 5,000 spectators for grounds hosting Premier League and English Football League matches).

Following widespread incidents of mass violence during the Euro 2020 final held at Wembley Stadium in July 2021, an independent review by Baroness Casey has made several recommendations to improve stadium safety. Some of these include a review of stewarding, increased penalties for football-related disorder and increased co-operation between private and public bodies.

Typically, sporting entities in the UK adopt one of the following legal forms (determined on a case-by-case basis but with the following generalisations).

Company Limited by Shares

It is most common for commercial sports organisations (such as football clubs and sponsors) to operate through a company limited by shares. Such legal entities can be “private” or “public” (ie, its shares are traded on a stock exchange). Key features include the ability to fundraise in return for issuing equity to investors and paying dividends from its profits to its shareholders. 

Company Limited by Guarantee

A company limited by guarantee is typically associated with “not-for-profit” organisations. It is the legal form normally adopted by sports bodies (such as national governing bodies) which seek to reinvest profits back into its particular sport. There is no share capital so this structure also tends to suit sports organisations with a fluctuating membership.

Charitable/Community Vehicles

A sports organisation which undertakes charitable and/or community purposes is often set up as a company limited by guarantee but there are other specific corporate forms available, including CIOs (charitable incorporated organisations, specifically created for charities) and charitable CBSs (community benefit societies, registered with the Financial Conduct Authority).

Whatever legal structure is adopted, charity is a status that can only be achieved if the organisation fulfils certain legal requirements and is confirmed by registering with the Charity Commission.

Unincorporated Association

Many local sports clubs/organisations exist based simply on an agreement between its members/stakeholders – for example, a governing constitution and/or set of rules – avoiding the formality and cost associated with operating as a company.

Whilst there are no existing governance laws that apply exclusively to sports organisations in the UK, there are a number of published codes, regulatory frameworks and applicable law that, together with public scrutiny, encourage and/or require good governance. As sport evolves into a multibillion-pound industry, there is increasing pressure on sport bodies at all levels to demonstrate good corporate governance.

Sport-Specific Governance Codes

The Code for Sports Governance (Code), published by UK Sport and Sport England in 2017, accelerated better corporate governance of sporting bodies. The Code sets out certain governance requirements under five principles (structure, people, communication, standards and conduct, and policies and processes). Crucially, sports organisations must satisfy the relevant requirements in order to receive central public funding. A revised Code was published in December 2021, with a focus on governing bodies developing a diversity and inclusion action plan, as well as increasing welfare and safety in sport.

The Sport and Recreation Alliance (the umbrella body for sport and recreation in the UK) has also produced a Voluntary Code of Good Governance, setting out seven principles of good governance that it recommends that sports bodies implement in order to perform their role effectively.

Owners' and Directors' Tests

Several sports bodies in the UK, notably the three main English football governing bodies – the FA, Premier League and English Football League (EFL) – have each established an Owners’ and Directors’ Test (ODT).

ODTs seek to protect the image and integrity of the relevant league as well as the interests of its other stakeholders by preventing unsuitable individuals from becoming an owner or a director of a club.

The ODTs are a prominent feature of football in England and regularly make the sporting headlines due to their controversial nature. For example, the following came to light in recent months.

• The Saudi Arabian Public Investment Fund (PIF), together with PCP Capital Partners, acquired Newcastle United FC for a reported GBP300 million. The deal had initially fallen through in July 2020, seemingly due to the acquirers’ failure to comply with the Premier League’s ODT. With disputes continuing in the background, it was finally announced in October 2021 that PIF, PCP Capital Partners and RB Sports & Media had completed the acquisition of the club, with PIF holding an 80% stake. Due to PIF’s close ties with the Saudi Arabian government, and human rights concerns regarding that government, the takeover was only allowed after the Premier League received assurances that the club would not be under Saudi Arabian control.
• The adequacy of the EFL’s ODT is also in the spotlight due to Derby County FC, currently playing in the Championship (the second level of English professional football). After high-value debts had not been paid by its owner, the club has now been placed in administration, with some wondering whether it can be saved at all.

The ODTs are not restricted to football, with other sports bodies such as the Rugby Football League administering a similar test which requires influential persons at a club under its jurisdiction to satisfy certain requirements. However, the football ODTs, in particular, tend to come under more scrutiny, and the Premier League is currently considering adding a human rights element to its test.

Other

Sporting organisations (and their officers) must also comply with applicable law. For example, the Companies Act 2006 sets out a number of codified duties for directors of companies.

Traditional Revenue Streams

UK sporting organisations such as national governing bodies, leagues and clubs principally derive revenue by exploiting their commercial rights, as set out in 2. Commercial Rights.

The COVID-19 pandemic had a significant impact on such traditional revenue streams, with the lack of live sport and behind-closed-doors action hitting match-day revenue and providing sponsors and broadcasters with the power to renegotiate deals, particularly if rights could not be delivered. 

UK Government

The UK government reacted to the short-term financial distress suffered by many UK sporting organisations due to the effect of COVID-19 by providing specific financial support to sport. While the sports industry was not as heavily impacted by the COVID-19 pandemic during the 2021–22 period (largely aided by the fact that live sport was not put on hold and attendance to live events was limited rather than restricted), the UK government worked closely with Sport England to make funds available, as detailed below. Additionally, it announced in August 2021 a GBP232 million investment to support athletes ahead of the Paris 2024 Olympic and Paralympic Games. 

Sport England

Many national governing bodies and sports bodies are eligible for obtaining central funding through Sport England (established by Royal Charter in 1996). Sport England invests in the region of GBP250 million of National Lottery and public money every year. Following a first “Winter Survival Package” in November 2020, Sport England made a further GBP300 million available to sports governing bodies in spring 2021 as part of its “Extended Survival Package”.

Other

Sports organisations also secure funding from stakeholders, donors and, increasingly, private capital (see further 4.4 Recent Deals/Trends). It is up to each organisation to determine how to distribute money across its sport.

Private Capital

The sports business investment landscape in the UK has experienced a notable increase of private equity, venture capital and institutional investment and interest. This trend continued in the first quarter of 2022, with investors confidentially backing sports properties – especially now that stadiums are full and rights-holders can more easily engage with fans.

In addition, sports governing bodies and leagues are considering alternative sources of investment such as private capital (which has not traditionally been the case) as they manage revenue shortfalls and working capital needs. Rights-holders will seek longer-term partnerships where investors can bring commercial expertise, connections, ideas and further sources of funding.

Recent examples include:

• Two Circles (backed by Bruin Sports Capital) acquiring the sports agency, LiveWire Sport;
• Private Equity Firm CVC Capital Partners acquiring a stake in the rugby Six Nations competition; and
• 49ers Enterprises acquiring a stake in Leeds United FC, with the option to take 100% control of the club.

Mitigating Risk

Private capital investment must navigate governance regulation (in particular around ownership and control – see, for example, 4.2 Corporate Governance), the establishment of breakaway leagues/events and reliance upon club/athlete/league performance. In addition, the ongoing pandemic will continue to cause concern and investors may seek the right to withhold investment should there be further disruption – as CVC reportedly requested as part of its Six Nations investment. Investment in sport will force private equity to accommodate the passion and emotions of fans not often present in many of their typical leveraged buy-outs.

Player Influence

More athletes and players are bolstering their earnings outside their playing careers by endorsing sport brands and/or investing in sports organisations. In February 2021, Therabody (a technology wellness firm) attracted investors including footballers Marcus Rashford and Kevin De Bruyne and rugby player Maro Itoje.

The door is open for athletes and players to invest in unique and purposeful sport properties such as women’s sport where lower valuations may make them more attractive.

Registering a Trade Mark

To register a UK trade mark, an application should be filed with the UK Intellectual Property Office (UKIPO), in compliance with the requirements set out in the Trade Marks Act 1994 (TMA 1994). An applicant can apply for:

• a word mark;
• a logo;
• a combination of the above;
• a trade mark series (up to six similar marks in a single application); or
• more unusual marks, such as a hologram, colour, sound or a pattern.

UK trade marks can be filed in up to 34 goods classes and 11 service classes (using the internationally recognised Nice Classification system).

Refusal

A trade mark application can be refused by the UKIPO on the basis of a statutory “absolute ground” (such as the mark exclusively designating the geographical origin of the goods/services). Recently, the UKIPO refused to allow Liverpool FC to register “Liverpool” for a wide range of classes, denying it the right to have exclusive rights to the name due to its “geographical significance” as a city. Interestingly, this contrasts with an earlier UKIPO decision to permit the registration of the club’s trade mark application for the well-recognised Liverpool city emblem – the “liver bird”. Here, it was found that, despite the city’s widespread use of the emblem, its incorporation within the club’s logo meant that the overall mark was distinctive and registrable.

A third party can then oppose an application on the basis of both absolute and “relative grounds” (for example, where the mark is identical and/or similar to an existing registration and there exists a likelihood of public confusion).

On 1 October 2021, the Sentencing Council published a definitive guideline that sentencers must have regard to when sentencing criminal offences under the TMA. This has been a significant development that should further deter counterfeiters and provide a degree of protection from abuse of registered trade marks. One of the most significant changes is the assessment of harm – this is now based on the equivalent retail value of the genuine goods being counterfeited.

A prime example of these counterfeit issues can be seen within the Premier League, with an estimated GPG30 million worth of counterfeit merchandise seized over the last 15 years.

Registration Advantages

A registered trade mark has the following key advantages:

• the period of protection is perpetual in theory (provided it is renewed every ten years and certain other conditions are satisfied);
• the holder has a monopoly right over the registered brand in respect of the goods and services for which it is registered; and
• the process for enforcing against infringers is more efficient and cost-effective than compared to relying on unregistered rights. 

As an example, British Gymnastics successfully argued a trade mark infringement against UK Gymnastics, in reliance to its registered trade marks. This case was taken to the Court of Appeal and subsequently held as a breach, based on the overall impression of the trade mark. The case demonstrated the importance of having the ability to rely on a registered trade mark.

Copyright

The UK’s copyright law is laid down in the Copyright, Designs and Patents Act 1988 (CDPA), whereby copyright:

• arises automatically (it does not require registration);
• is designed to protect the results of creative output; and
• is formed as soon as that output is created and fixed in material form.

In general, ownership of the copyright is vested in the “author” of the work, with copyright protection lasting until:

• 70 years after the author’s death for literary, dramatic, musical or artistic works (and in the case of films, 70 years after the death of the director, screenplay author and composer);
• 70 years from first publication in relation to sound recordings; and
• 50 years from first publication in respect of broadcasts.

Defences

There are various “permitted uses” under the CDPA which serve as a defence for alleged copyright infringement (such as non-commercial research and reporting), but in most instances the user must attribute sufficient acknowledgement to the copying. 

“Fair dealing” must also be established in some cases, requiring the user to demonstrate that the copying does not exceed what an honest and fair-minded person would consider to be justified. This has no statutory definition and will be assessed on a case-by-case basis, depending on the facts in hand. There is also the common law defence of “public interest”.

In the case of ECB & Sky v Tixdaq & Fanatix, Tixdaq – the developer of the Fanatix app – was unable to demonstrate fair dealing through their uploading of eight-second highlight clips from cricket matches (the copyright in which was owned by the ECB, and Sky).

Databases

The UK also recognises a legal database right under the Copyright and Rights in Databases Regulations 1997. This is an unregistered right that arises automatically upon the creation of the relevant database.

A database right protects the contents of the specific database, where there has been substantial investment in the acquisition, verification and/or presentation of the data comprised within it (which British Horseracing could not establish in the landmark case against William Hill).

UK citizens/business are now ineligible to hold database rights in the EEA for databases created on or after 1 January 2021.

Image Rights

There is no standalone legal recognition for image rights (or personality rights) in the UK. Instead, individuals must rely on a myriad of IP and other rights to protect and exploit their image, including trade marks, passing off, privacy rights and robust contractual protections.

Passing Off

High-profile sportspersons may be able to rely upon the tort of passing off to prevent the unauthorised use of their image in a commercial context. To bring a claim, the individual must demonstrate:

• goodwill attributed to their name/image;
• the third party has misrepresented to the public a link between the sportsperson and the third party’s goods and/or services, and this has, in turn, led to customer confusion; and 
• damage has been, or is likely to be, incurred as a result of this misrepresentation.

One of the leading cases in this context is Irvine v Talksport Ltd, where Eddie Irvine, the Formula One driver, successfully claimed passing off against Talksport for manipulating a photo of him holding a phone and replacing this with a Talksport handheld radio, thereby falsely representing that he had endorsed the station.

Unlawful Exploitation

The issue of unlawful exploitation of image rights has arisen on numerous occasions, particularly in the context of football players.

Notably, in 2020, Gareth Bale tweeted (following on an original tweet from fellow footballer Zlatan Ibrahimović) in relation to the alleged unlawful use of player images in the FIFA video game. However, EA – the developer of the FIFA video game – currently licenses player image rights (as well as other club rights, such as stadium names) collectively from the Premier League. Nothing has since been said on this, although it appears to still be a prominent discussion point in the sporting industry.

These types of claims are also being seen in other sports. For example, the cricket player’s union, FICA, have alleged that the International Cricket Council is using player’s image rights without appropriate approvals from the players by means of fantasy cricket leagues and documentaries.

Licensing

Intellectual property possesses significant intrinsic value to both sports governing bodies and players/athletes in the UK, each of whom regularly license their IP rights.

By way of example, a UK sports governing body may own all of the IP rights in a new event format, including the trade mark to the name of that event and the copyright in its rules and regulations. These can be licensed, as individual rights or as a package, to the various different stakeholders involved in the hosting of that event (such as venues), those participating (teams or players/athletes) and to those exploiting commercial and media rights (such as broadcasters, sponsors and official suppliers).

The exploitation of IP through a licensing structure enables the rights-holder to retain control and ownership of the relevant rights, as well as generating revenue from the use thereof. The continued exploitation of these rights will also increase goodwill and brand value for the rights-holder over time.

Assignment

Broadly speaking, the only formality required to effectively assign UK IP rights is for the assignment to be in writing and to be signed by the assigning and assignee party. In certain instances – for example, in the case of registered trade marks – the assignment must also be recorded at the UKIPO to update the official record.

Use of Sports Data

Sports bodies and other stakeholders in the UK are using sports data in increasingly sophisticated ways to, amongst others:

• improve athlete performance;
• engage with fans;
• protect the integrity of their sport; and
• enhance sponsor/media rights packages.

Sports bodies are also increasingly licensing official data directly to third parties, particularly betting companies. 

Kevin De Bruyne recently engaged an analytics company to assist his contract negotiations with Manchester City. The company (Analytics FC) used an algorithm to project De Bruyne’s future performances. Based on this data, he negotiated the terms of his contract with Manchester City.

As a snapshot of sports data activities by sports bodies and other stakeholders in the UK over past 12 months alone:

• in 2020, England Rugby trialled the training use of a "smart" rugby ball which collects data on the speed and distance of passes – in 2021, this trial was extended further with the use of a “smart ball” in the 2021 Women’s Six Nations;
• Liverpool have signed a deal with DeepMind to explore the use of AI in football – it can be used, for example, to determine what impact a tactical change may have, or the changes a team may make in the event of injuries; and
• the England and Wales Cricket Board was forced to rely on Depth App, which recorded player data, when a COVID-19 outbreak forced all of the soon-to-be participating England cricket team into isolation, with the information then being used to aid selectors in finding in-form cricketers to form a squad against Pakistan.

Issues for Sports Bodies

While sports bodies may assume they have the right to collect and commercially exploit data relating to their sport (or to restrict a third party from collecting such data), the legal reality is often more complex. Sports bodies must consider the effect of data protection, contract, intellectual property and competition legal frameworks (amongst others), often in multiple jurisdictions.

In the wake of GDPR (as referred to in 5.6 Data Protection), fans and athletes are also becoming more alert to the use of their personal data by third parties. In July 2020, a group of over 400 professional football players in England and Scotland announced that they were taking legal action against various betting and data processing companies (including official partners of their clubs and leagues) for the use of player personal data without consent, in breach of GDPR, in what has been dubbed "Project Red Card".

Project Red Card and Lloyd v Google

A recent ruling in Lloyd v Google slightly reduced the uncertainty around the future of athlete data and Project Red Card. The Supreme Court unanimously held that the claimant should not be successful in bringing representative action against Google. The judge ruled that, to be awarded compensation, the claimant must have actually suffered damage as a result of the breach. The breach alone is not sufficient.

Notably, group action as suggested by the group in Project Red Card may no longer be viable following this ruling. However, there is still a possibility for individuals to bring a claim where damage has been suffered.

As the amount of sports data being collected in the UK increases and the methods of exploitation become more complex, it is important that sports bodies and stakeholders establish and implement robust data policies which anticipate and mitigate potential legal risks. Nevertheless, as sports data becomes a more important commercial asset in the industry, the number of legal challenges between stakeholders are only expected to increase. 

Data Protection Legislation

The Data Protection Act 2018 (DPA), the General Data Protection Regulation 2016 (GDPR) and, following Brexit, the retained UK version of GDPR (known as UK GDPR), may all apply to the use and exploitation of sports-related data in the UK.

Post-Brexit, GDPR is only relevant to UK organisations who are continuing to offer goods or services to, or monitoring the behaviour of, EEA individuals (eg, a club which sells merchandise to fans based in EEA countries). 

GDPR Impact

The introduction of GDPR has had wide-ranging impacts on the ability of organisations to use and exploit personal data, which in the sporting context impacts upon both fan and player/athlete data. 

Alongside the tightening of the regulatory landscape, there has been a huge increase in the use of new technologies and digital innovation, whether that is the use of wearable technology, augmented reality (AR) and virtual reality (VR) or matchday apps, to name but a few. This has necessitated a sharp focus on the data protection impacts of the use of the same, from the design stage through to the commercialisation thereof.

Sensitive Personal Data

In the context of more sensitive types of personal data (termed “special category personal data”) such as player health and biometric data, the ability for rights-holders to collect and use this data has become more challenging, in large part due to the stricter requirements for obtaining valid consent from the individual.

By way of example, it might be difficult for a rugby club to prove that player consent is freely given (and that consent can be refused without detriment) where, for example, all players are being asked to use wearable technology during practice sessions, particularly because there is an inherent imbalance of power between an employer (club) and employee (player).

Exemptions

The DPA offers certain useful sports-specific exemptions to the requirement to obtain consent for the processing of special category personal data. These have been welcomed by governing bodies, anti-doping bodies and integrity units alike.

In reliance on Article 9(2)(g) GDPR and UK GDPR, where the processing of special category data is for reasons of substantial public interest, the UK introduced an anti-doping exemption and a sports integrity exemption, which have greatly facilitated the sharing of special category personal data for these legitimate purposes within sport.

Types of Dispute Resolution

In England and Wales, disputes are resolved through litigation before the national court system unless the parties agree to alternative dispute resolution (ADR).

Parties need to consider their relationship to one another and any agreement and/or rules that govern that relationship, which may require a certain type of dispute resolution over another.

However, where ADR or other internal dispute mechanism was not agreed to by the parties or provided for in relevant rules, then the national court system will be competent and parties would therefore not be required to, say, first exhaust governing bodies’ respective internal dispute resolution mechanisms.

For instance, Liverpool FC’s sponsorship dispute with marketing agency Winlink Marketing was resolved before the High Court, while it was an FA Regulatory Commission that ruled in the FA’s betting charge against England and former Tottenham Hotspur FC player Kieran Trippier.

ADR and the National Court System

Even where parties agreed to ADR, the national court system may still have a role to play. Following the conclusion of a sports governing body’s internal dispute resolution mechanism, national courts are competent to review the decision.

However, appeals against decisions of sports governing bodies’ judicial bodies are limited in scope, and national courts effectively carry out a supervisory role to ensure that parties’ rights were duly exercised (see further 6.2 ADR, including Arbitration and 6.3 Challenging Sports Governing Bodies).

Matters for Arbitration

The Arbitration Act 1996 (Act), which is currently being reviewed by the Law Commission, provides for the possibility to resolve disputes by arbitration before an arbitral tribunal. The Act sets out certain formalities, including that the arbitration must be agreed to by all parties involved and be provided for in writing.

While much freedom is accorded to parties, certain disputes cannot be resolved through arbitration, such as criminal matters, insolvency proceedings or certain employment disputes. In such cases, the national court system will be competent by default.

In the sports sector, it is common for UK sports governing bodies to provide for dispute resolution through arbitration in their rules, which are accepted by participants before competing. For example, the FA, the Premier League and Premiership Rugby all have internal dispute resolution mechanisms.

Once the internal mechanisms are exhausted, a party may appeal the decision before national courts if they believe the decision was reached unlawfully. The Act allows appeals in cases where:

• the arbitral tribunal was incompetent to rule on the dispute;
• there was a serious irregularity affecting the tribunal, the proceedings or the arbitral award that has or will cause injustice; or
• a question of law arises out of the award (although this may be excluded in the arbitration agreement).

If no dispute resolution rules are provided for by sports governing bodies in their rules, parties may wish to resolve a dispute through arbitration before external tribunals, such as Sport Resolutions, an independent dispute resolution service that is based in London and that provides sport-specific ADR services.

Mediation

Mediation allows parties to attempt to find an amicable solution without affecting their right to resort to a more direct approach if a favourable outcome is not found.

In England, Sports Resolutions (previously the Sports Dispute Resolution Panel) provides sport-specific mediation services. With lower costs, more flexible timeframes and increased confidentiality compared to litigation before national courts or even arbitration, mediation can be appealing to the fast-paced and sensitive nature of often high-profile sports disputes.

Enforcing Sanctions

It is common for a UK sports governing body to provide in their rules how they will enforce sanctions, whether these are financial or sporting. Decisions of sports governing bodies that are considered arbitral awards can be enforced under the Act (as defined in 6.2 ADR, including Arbitration).

Domestic sports governing bodies may seek to give worldwide effect to their decisions through co-operation with international federations. As referred to in 6.1 National Court System, Kieran Trippier was sanctioned under both the FA’s Regulatory Commission and the FIFA Disciplinary Code.

National Court Involvement

The decision taken by the judicial body of a sports governing body can be challenged to the national court system on limited grounds. It was confirmed that the national court system has a supervisory role in Bradley v Jockey Club.

Judicial bodies of sports governing bodies are held to the following standards by the national court system:

• the relevant regulatory or contractual framework gave the judicial body the authority and power to act as it did;
• the judicial body did not abuse its power;
• the decision that was reached was rational; and
• the judicial body acted fairly in regard to the process by which a decision was taken (in accordance with the principles of natural justice).

Employment Status

In many elite team sports in the UK, athletes are employed by their club under contracts of employment. Such arrangements typically include a number of standard terms agreed on a collective basis between relevant player unions, clubs and governing bodies, with commercial terms (ie, remuneration, the contract’s duration and any bespoke provisions pertaining to use of the athlete’s image) usually negotiated directly between the athlete and the club.

Under English law an employee accrues a range of legal rights. Where workers are not classified as employees, this status can be deemed dependant on circumstances designed to ensure employees cannot be cheated out of their rights simply by terminology.

The Employment Appeal Tribunal’s 2020 decision regarding cyclist Jessica Varnish’s failed claim that she should be deemed an employee of British Cycling gives a helpful summary of some key considerations determining employee status:

• Ms Varnish signed an athlete agreement with British Cycling, the purpose of which was to provide her with a personalised training plan, in the hope that she would be selected to compete for Great Britain;
• although the arrangement made her eligible to receive certain funding from UK Sport, Ms Varnish did not receive any remuneration from British Cycling and the arrangement with UK Sport was more analogous to a university grant;
• Ms Varnish did not perform a service for British Cycling (or UK Sport), but instead was performing a commitment to train in the hope of becoming a successful cyclist on the international stage.

This is by no means an exhaustive analysis of the determinative factors for employment status, which is a notoriously uncertain concept in the UK.

Salary Caps

Salary caps are becoming a feature of sport in the UK. To date, a sports governing body or league is generally free to exercise its discretion in setting salary restrictions in its rules, providing these are proportionate.

In February 2021, the English Football League’s (EFL) set a salary cap on clubs competing in League 1 (third division) and League 2 (fourth division) and fixed a limit on how much clubs could spend on their total squad’s salaries. However, over the past year, the EFL removed the salary caps for League 1 and League 2 clubs that had been ruled unlawful by an arbitration panel. The challenge was brought by the Professional Footballers Association (PFA), arguing the restrictions had come in without appropriate consultation and agreement. This was said to have breached the Professional Football Negotiating and Consultative Committee constitution.

This concept is still under debate and could continue to be subject to change in the post-COVID-19 era.

Saracens FC

The salary cap in Premiership Rugby led to an important dispute between Premiership Rugby and Saracens FC. The headlines are as follows:

• the club breached salary cap rules by failing to disclose player payments in the form of investment;
• the investments took the squad’s salary payments over the club’s permitted GBP7 million threshold;
• Saracens received a 70-point penalty, which saw them relegated to the Rugby Championship for the following season;
• the penalty was the heaviest seen in English rugby, affecting one of Europe’s heavyweight rugby union clubs.

Other Rugby Clubs

Since the Saracens breach, there have been examples of other clubs potentially falling foul of the salary cap rules with investigations ongoing. As recently as 15 March 2022, Leicester Tigers were fined GBP310,000 for salary overspend, also suffering consequent damage to their reputation.

Compatibility with Competition Law

Salary cap rules can raise issues with wider competition laws and the common law doctrine of restraint of trade. Where a rule impacts upon an athlete’s ability to earn a living, the body imposing the rule must demonstrate that the rule is a legitimate restriction and is proportionate in its approach. In the Saracens case, it was found that the salary cap was legitimate and proportionate and promoted the financial health of Premiership Rugby clubs, so was considered a permissible restraint.

Statutory Employment Law

Where UK athletes are employees (see further 7.1 Sports-Related Contracts of Employment), the right not to be unfairly dismissed, family rights including maternity leave, and the right not to be subjected to discrimination, will generally override any contradictory provisions in their contract.

It is fairly standard, however, for UK sporting employment contracts to require disputes to be addressed via a bespoke dispute resolution forum, such as Sports Resolutions, which can be an effective method for an athlete to enforce their statutory employment rights.

Constructive Dismissal Case Study

Under his employment contract with Newcastle United FC, former manager Kevin Keegan had the final say in recruiting players. When in practice this did not happen, he resigned, claiming that he had been constructively unfairly dismissed (ie, that the club’s actions constituted a repudiatory breach of contract, entitling him to treat the contract as having been terminated by the club). In 2009, the Premier League Managers’ Arbitration Tribunal found in Mr Keegan’s favour and awarded him compensation for constructive unfair dismissal.

Brexit and Free Movement

When the UK was a member state of the EU, citizens of the European Economic Area (EEA) enjoyed a right of free movement and, as such, UK sports governing bodies could not impose restrictions on the number of EEA citizens they allowed to compete in their competitions, or to be included within a club’s squad.

Since 31 December 2020, the UK is no longer subject to free movement rules and all foreigners (including EEA citizens) require a permit to work in the UK, except for Irish nationals; further, EEA nationals (and certain others) who were already residing in the UK can apply for "settled status" under the EU Settlement Scheme, which allows the individual to remain in the UK indefinitely.

Obtaining a Work Permit

Foreign athletes (and other sporting staff) generally need a work permit issued by the Home Office in order to be permitted to work in the UK. As such, arrangements are often made between the Home Office and the relevant sports governing bodies.

This commonly involves a sports governing body granting a Governing Body Endorsement (GBE), depending on whether the athlete meets certain criteria agreed in advance with the Home Office. Where a GBE is granted, the athlete is then usually granted a work permit by the Home Office without the need for further analysis to be undertaken. 

International Sportsperson Visa

As of October 2021, international athletes coming to the UK are also able to apply for an International Sportsperson Visa. This has replaced both the T2 and T5 visas and collated both requirements together. The Sports Governing Bodies appendix, located within this new set of rules, sets out the sporting organisations that can issue an endorsement to certify an athlete as meeting the visa requirements. The sportsperson must also be issued with a valid certificate of sponsorship by the sponsoring club.

In light of Brexit, and in advance of the January 2021 transfer window, the FA agreed with the UK government and key football stakeholders the criteria for granting of a GBE, which provided for automatic approval if a player from one of the top 50-ranked FIFA nations had featured sufficiently for their national team, or if players accrued sufficient points based on sporting criteria (such as the number of club matches played and their club’s progression in European club competitions). There was also an Exceptions Panel to determine whether a GBE should be granted to players falling short of the required points total.

Traditional Esports Market

The traditional esports market in the UK features non-sport video games (such as League of Legends and Counter-Strike) and is already relatively sophisticated: tournaments, teams and individual players have huge followings, live events fill arenas, prize money on offer is substantial and betting on game outcomes is available.

Traditional sports with an “obvious video game” have also been successful in the UK, including the hosting of the FIFA eWorld Cup from the O2 Arena in London since 2018. Consequently, many esports teams and game publishers are based in the UK, including Guild Esports – a new global esports business backed by David Beckham – which closed an IPO in October 2020.

Activate, a technology consulting firm, estimates that more than 250 million people watch esports.

COVID-19 Effect on Esports

COVID-19 has undoubtedly accelerated the professionalism and commercialisation of esports and virtual sport in the UK, as it has across the world. People are spending more time at home and an increasing number have turned to esports as entertainment. For example:

• there has been a reported marked increase in online events, viewership and active users according to Fnactic Insights: Esports Covid Report, 2020); and
• Excel Esports secured a ground-breaking partnership with BT (a non-endemic sponsor) including naming rights and apparel branding. 

Traditional Sports and Esports

Traditional sports are also embracing esports and virtual sport with real purpose and seizing the opportunity to engage with its fanbase, sponsors and potentially a new and untapped audience. The International Olympic Committee (IOC) appointed the first-ever head of virtual sport at the start of this year. The aim is to continue the growth and focus of virtual sport for the Olympic body and oversee the Olympic Virtual Series. There were positive discussions around the inclusion of esports at the Paris 2024 Olympic Games, although ultimately it was decided it was premature. There is definitely a much greater focus being placed internationally on esport inclusion at traditional sport tournaments.

Additional examples include:

• the 2022 FIFA World Cup;
• the 2022 Commonwealth Games will host an esport pilot event;
• F1 hosted the Virtual Grand Prix in 2020 in the absence of F1 racing, featuring professional esport players, drivers and celebrities;
• the 2021 Virtual Olympic Series, featured nearly 250,000 participants and more than 2 million entries; and
• the virtual Grand National in 2020 attracted peak viewing figures of 4.8 million.

There has been a lot of encouraging activity over the past year regarding women’s sport, with 2022 set to be one of the biggest years yet. The Women’s Rugby World Cup, UEFA Women’s Football Euros, Women’s Cricket World Cup and the many female competitors at the Commonwealth Games will all increase the profile of women's sport over the next few months.

Although COVID-19 effectively pressed pause on women’s sport in the UK, with far-reaching cancellations and curtailments, there are encouraging signs that women’s sport continues to demonstrate mass-market appeal and commercial potential, including the following developments:

• the UK government confirmed GBP2.25 million for elite women's football and GBP4.2 million for netball from its Sport Winter Survival Package;
• on 22 March 2021, the FA, Sky Sports and the BBC announced a three-year landmark rights deal (reported to be in the region of GBP8 million per season) for the Women’s Super League (WSL) from the 2021/2022 season – this is the first time that the rights to the WSL have been sold separately from the men’s game, with clubs receiving a proportion of revenue to aid their development;
• on 16 March 2021, World Rugby announced WXV, a brand-new global women’s competition due to launch in 2023. The creation of WXV is supported by an investment of GBP6.4 million from World Rugby and a dedicated commercial programme which will have a positive impact on each Home Nations team;
• an increasing number of women’s club teams are now joining forces with their respective men’s club teams, thereby benefiting from greater integration and shared resources – recent examples are Burnley FC Women, who were brought under the same ownership as the men in February 2021, and Thomas Sandgaard, the owner of Charlton FC, acquiring Charlton Athletic Women;
• equal prize money in the men’s and women’s tournaments in cricket’s new elite competition, The Hundred;
• multi-sport partnerships, such as the Women’s Elite Sport Partnership established in March 2021 by West Ham FC Women, together with five London and Essex-based partners across cricket, netball and basketball;
• the UEFA Women’s Football Euro 2022 will be hosted in the UK, with an expected 250 million people set to watch;
• in January, it was confirmed that the new women’s football contracts would include their right to maternity leave and long-term sickness benefits; 
• the Beijing Olympic games were the most gender-equal Olympics to date with 45% being female athletes; and
• the Women’s Cricket World Cup has increased its prize money to USD3.5 million.

With continued investment from rights-holders, broadcasters and sponsors, we expect women’s sports to only gain momentum from here.

Sports properties are increasingly exploring how to use non-fungible tokens (NFTs) to generate additional revenues and engage with fans. While the relationship between these “one-of-a-kind” digital assets and sport is still in its infancy, sporting rights-holders are looking closely at this new revenue-generating opportunity, which combines public interest in elite sport with the exclusive, authentic sporting content that it creates.

Andy Murray and Kevin de Bruyne are examples of athletes who have launched their own NFT collection. Currently, the key applications of NFTs by sports properties include the creation of digital collectibles (eg, digital trading cards featuring players or highlights) and "fan tokens" providing enhanced benefits to fans (eg, the right to access promotions or exclusive content).

However, whilst presenting commercial opportunities to rights-holders, some NFTs may relate to assets which infringe their IP rights or facilitate such infringements. For this reason, it is important for rights-holders to understand and engage with NFTs in order to adequately protect their commercial rights and those of their partners.

The main regional issues impacting sport in the UK are the fallout from Brexit and the ongoing, but slowing, COVID-19 pandemic, as highlighted below:

• the impact of COVID-19 on match-day revenue (see 2.1 Available Sports-Related Rights), disruption to the delivery of rights (see 2.2 Sponsorship), accelerating the emergence of esports and virtual sport (see 8. Esports); and
• the impact of Brexit on data protection (see 5.6 Data Protection) and free movement of athletes and other sporting staff (see 7.3 Free Movement of Athletes).