Spain: /Portugal: Sport Annual Report 2016: In The Money

Last Updated: 6 March 2017
Article by Iberian Lawyer

The new way of negotiating TV football rights in Spain means many clubs are now considerably wealthier than they were just a few years ago – as these clubs become run in a considerably more professional manner, so opportunities for lawyers are increasing

The fact that Spanish football clubs now negotiate broadcasting rights on a collective basis – as opposed to the old regime where individual clubs agreed their own TV deals – has dramatically changed the game. Almost overnight, lesser clubs that were struggling financially under the old system saw their revenue increase substantially. Suddenly, significantly more Spanish clubs are viable entities, with the result that they are becoming attractive assets for investors. For law firms with expertise in the field of sport, opportunities are now in abundance as clubs look to professionalise their structures, ensure they are compliant with all the relevant regulations, acquire more players at a greater cost and promote their brand around the world. However, it is important to note that a "track record" in sports-related law is vital if firms wish to fully exploit these new opportunities. Lawyers point out that the world of football is a very insular one and consequently it can be difficult to win the trust of potential clients in the industry.

Cuatrecasas, Gonçalves Pereira partner Roberto Álvarez says: "This is a good moment for sport." He adds that Brexit, for example, will change the football world and will create uncertainty related to employment and tax-related issues as well as impacting on potential acquisitions of football clubs. "Brexit means there will be two markets in football, the UK market and the European market – Brexit could make things better for the European leagues," he says. Some lawyers speculate that there are also questions about whether UK football teams will continue to participate in European competitions, such as the Champions League, for example. Meanwhile, Jordi López, partner at Pintó Ruiz & Del Valle, remarks that Brexit could impact on the status of European players in the UK and raises questions about whether the English Premier League will continue to be as attractive to footballers from overseas.

Meanwhile, with the pound recently falling against the Euro following Brexit, Ignacio Legido, managing partner of the legal division at BDO Abogados, says Spanish football clubs could be given a boost in that it could increase their chances of buying footballers from English clubs. In addition, another Brexit-related issue is that, if the UK does leave the European Union, its tax regime could change and lawyers are speculating that the new regime could discriminate against overseas footballers playing in the UK.

Hot property

There are many investors interesting in buying football clubs, which will present opportunities for law firms, according to Álvarez. He adds that E-sport (also known as electronic sports or professional video gaming) is another growing area of practice, which raises issues including whether E-sport should be regulated in the same way as other professional sports, as well as employment matters related to teams employing professional gamers. Legido also highlights the potential of E-sport, "a new market inside the sports world".

Advising on EU and competition law issues affecting footballers is another big opportunity for law firms, according to Roberto Vallina, senior associate at Roca Junyent. Meanwhile, lawyers also identify tax issues as a source of work – earlier this year, one of the best players in the world, FC Barcelona's Lionel Messi, was sentenced to 21 months in prison for tax fraud, though he has appealed against the sentence. Meanwhile, López says that, with the recent changes to the rules governing the sale of football broadcasting rights in Spain, many football clubs in the country have doubled their income and this also represents an opportunity for the law firms that advise clubs.

The growing popularity of Spanish football around the world could also generate more work for M&A lawyers. More international investors, particularly investors from China, are becoming increasingly interested in acquiring Spanish football clubs. Meanwhile, López says football-related litigation is a big opportunity for Spanish law firms given that the same regulations govern football around the world. "The international environment is uniform, it is enacted by international federations, so Spanish lawyers can represent Chinese clubs, for example, in this respect, though in some cases, the assistance of local lawyers is needed," he adds.

Lenders keen

Garrigues partner Félix Plaza says the centralisation of TV football rights in Spain – meaning that La Liga sells the rights as a single entity, rather than individual clubs negotiating their own deals as used to be the case – together with the strict rules on Financial Fair Play introduced by La Liga, has reduced the debt of many clubs and means that they are finding it easier to access finance. "Clubs are able to offer income from TV rights as a guarantee [when trying to obtain finance] and there are a lot of financial institutions willing to give money to clubs," he adds. Plaza says this creates a lot of opportunities for law firms to advise on the clubs' acquisition of players or the international expansion of Spanish clubs. "Spanish clubs need to sell their product abroad and this means they need advice on the brand itself, digital platforms, and e-commerce," he explains.

Tax is also an increasingly important issue in sport, Plaza says. "The tax authorities are putting enormous pressure on individual players and clubs, some tax structures that fit within the legal framework are being considered tax evasion – more legal security would be highly recommended," he adds. Lawyers argue that people working in sport at all levels are increasingly aware of the importance of complying with laws, whether that be the promoters of sport, the clubs, or managers. One partner at a leading Spanish firm says: "A lot of parties in sport in Spain thought tax was not important, but they now believe they have to invest in a good law firm to avoid future risk and this is a good thing for major law firms."

Illegal streaming

Litigation related to pirate websites broadcasting sports events is another source of work for law firms, according to Bird & Bird of counsel Raúl Bercovitz. "The number of websites providing illegal streaming is increasing," he says. Bercovitz adds that this trend could partly explain why viewing figures for Sky Sports' live Premier League matches in the UK has fallen 19 per cent this season. "The problem is that the quality of broadcasts on the streams is not bad enough [to encourage people to buy subscriptions to the legal TV packages] and for the owners of the rights, this is a big problem," he says. "Even if you litigate against a pirate website, new pirate websites will appear – some suggest it is not effective to sue pirate websites because if a website is domiciled in Hong Kong, for example, it's difficult to bring it to Spanish courts. Now the question is should the intermediaries (for example, telecoms companies) be sued in order to make them cease giving access to these pirate websites."

Álvarez says that the sports practices at around 90 per cent of law firms in Spain focus on football, so there are opportunities in other sports, such as motorsport where services can be provided to teams, riders/drivers and promoters. He adds: "Motorsport is a global sport so lawyers with an international approach are needed as there are different jurisdictions and different tax frameworks involved." Lawyers have also identified 'street sport' as a massive growth area: "Public racing/running is now a major industry," says one partner.

Clients in the sport industry increasingly want lawyers who are highly specialised in areas such as EU and competition law, while having a "sensitivity" to the needs of clients that operate in sport, according to Vallina. He adds that there are also opportunities for law firms to advise on competition matters in relation to "state aid to football clubs". Another partner remarks that acting as agents to football players is also an opportunity for law firms: "The agents of football players are not really professional; the risk for the players is that, with transfers involving a lot of money, players could have problems with the tax authorities." However, the partner adds that some agencies representing footballers are becoming increasingly sophisticated with some recruiting in-house counsel.

Third party ownership ban

There is the potential for international federations to come into conflict with laws in different jurisdictions, according to one partner at a major Spanish firm. He cites the example of UEFA's ban on third-party ownership of professional football players' contracts as a ruling that comes into conflict with national laws. The partner also cites the example of FIFA wanting rules applied that "come into conflict with the principle of the free movement of people". He adds: "In many fields, they [sporting federations] are regulating things they shouldn´t be regulating."

Women's sport is another booming area. "In the next two years, women's sport will increase and there will be more investment in women's sport," says one partner. He adds that there are a number of issues in women's sport which could lead to legal challenges and cites the example of some professional sportswomen's contracts including clauses that stipulate the contract will be terminated if she becomes pregnant. Meanwhile, sports stadium naming rights is expected to be a major growth area: "Eighty per cent of Spanish clubs are not exploiting stadium naming rights, but in two years, 90 per cent of them will be." Cuatrecasas, Gonçalves Pereira associate Teresa Méndez Flórez says sport-related sponsorship is a major growth area for law firms: "Investment in sport sponsorship is growing and this is one area where we are focusing our attention." EU and competition law issues are common in sport, according to Vallina. He highlights restrictions imposed by international sporting federations and says they will be an issue in the future. For example, he highlights "EU individual athletes being prohibited from competing in another EU member state's national championship, bans on athletes competing in non-federation events, or the creation of European competitions such as the Basketball Euroleague" and adds that these matters might be particularly contentious.

With football clubs significantly boosting their income as a result of the new method of negotiating TV rights, lawyers predict that this could result in more business for law firms. However, it is not a foregone conclusion that all firms will dramatically boost their sport-related income. As one partner says: "There is a reluctance on the part of clubs and federations to try new things – many big law firms are trying to build new sports teams, but the world of football is very closed and it is a market in which trust is of the utmost importance."

Portugal: Financing football

Football club financing is creating opportunities for law firms in Portugal, according to Paulo Farinha Alves, partner at PLMJ. He adds: "Other factors that have contributed to the growth in work are the increasing complexity of players' transfer rights, television broadcast rights, sports betting and advertising, and the complexity of domestic and European regulations and the related litigation and arbitration issues concerning these areas." Contractual issues are also generating work for lawyers, says Farinha Alves. "For example, how to make long contractual obligations compatible with clauses providing for high release fees to protect the clubs."

Vieira de Almeida associate António Mendes de Almeida says Portuguese lawyers currently have an opportunity to develop traditional sports-related work such as advising clubs, sports associations and professional leagues, players, agents, investors and governing bodies on day- to-day operations, in particular regarding regulatory and contractual matters (with the emphasis on sponsorship and media), but also funding and debt restructuring. He adds: "We believe that there is a growing trend among clubs, sports associations/professional leagues and other sports entities to reduce their internal legal departments and outsource legal work to full-service law firms with strong sports law practices." Mendes de Almeida also says changes to FIFA rules that allow any person to act as a player's agent represents an opportunity for law firms as does online betting and E-sports.

The major development in sport in Portugal in the last 12 months from a legal perspective was the Sports Arbitration Court becoming fully operational, according to Abreu Advogados partner Fernando Veiga Gomes. Meanwhile, at international level, Veiga Gomes adds that the major change was the acquisition of "many football clubs by funds and investors as a result of the FIFA ban on third-party ownership of economic rights of football players". He says: "Those investors are now looking for investment opportunities in football clubs and in Portugal it is still a lesser investment compared to the five big European football leagues."

Sport is indeed a growing area for law firms, says Rui Vaz Pereira, associate at Cuatrecasas, Gonçalves Pereira in Lisbon. "The football industry has been consistently growing over the last two decades," he adds. "For instance, between 1995 and 2011, the number of football transfers in the EU has been multiplied by 3.2 while the total value of transfer fees has been multiplied by 7.4, reaching the record figure of €3 billion." Diogo Leote Nobre, partner at Miranda says football-related advice generates the vast majority of sport-related work for lawyers. He highlights issues relating to relations between clubs, players and coaches in the context of player transfers, as well as disputes involving governing bodies. Leote Nobre says: "Football is expected to remain responsible for the vast majority of instructions."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions