Regulatory

Governance structure

What is the regulatory governance structure in professional sport in your jurisdiction?

The responsibility for governance in Germany primarily lies with the sports bodies because of the autonomy granted to clubs and federations by the German constitution. Although there is no specific regulatory governance of professional sport by the state, the general legal framework (civil law, public law, criminal law, etc) applies.

Protection from liability

To what extent are participants protected from liability for their on-field actions under civil and criminal law?

Civil liability

Participants are generally only held liable for on-field actions that are considered serious breaches of the rules of the respective sport or that are unfair (according to the German Federal Court of Justice). A simple breach of the rules would therefore not lead to civil liability. However, if civil claims for damages are brought against an individual athlete, the athlete’s insurer (or the event organiser for which the athlete is participating) might be directly sued for damages.

Criminal liability

It depends on the sport in question. But criminal liability will generally not be incurred unless the athlete commits a wilful act to injure an opponent or an official.

In addition to the liability for injuries caused by an athlete, liability (civil and criminal) can also be incurred for on-field actions if the athlete is involved in unlawful betting activities.

Doping regulation

What is the regulatory framework for doping matters in your jurisdiction? Is there also potential secondary liability for doping offences under civil or criminal law?

The Anti-Doping Act came into force in 2015 (amended in 2017). Under this, athletes who test positive for performance-enhancing drugs (PEDs), are found guilty of applying forbidden methods or are found to be in possession of PEDs face a prison term of up to three years. Those who provide them with the substances face a sentence of up to 10 years.

There is no case law on secondary liability. The only possibility for imposing secondary liability for doping offences is under the regular provisions on aiding and abetting or on inciting another person to wilfully commit a crime. In addition to the aforementioned punishment for providing athletes with PEDs, other profession-related disciplinary measures may apply (eg, the professional rules applicable to physicians who engage in unlawful conduct).

Financial controls

What financial controls exist for participant organisations within professional sport?

In Germany, clubs within a league system have to undergo a licensing process. To obtain a licence, the team or the relevant club has to prove that it has a stable economic base. No financial limits or restrictions are imposed as long as this stable economic base is documented. German football has introduced a regulation for clubs that operate in the form of commercial companies. According to this regulation, the majority of the voting shares of these companies must be held by their member-controlled parent associations (the ‘50+1 rule’). This rule is meant to protect German football clubs from the (anticipated) adverse effects of outside influences. In particular, it is meant to safeguard the economic stability of the clubs, the relationship between professional and amateur sport within the clubs, and the integrity and credibility of competitive sports.

The Bundesliga, a professional association football league, has also enacted regulations that prevent minority ownership in more than one club. This is meant to prevent investors from having significant stakes in several different clubs. The UEFA Financial Fair Play Regulations also exist in the area of football. According to these regulations, clubs taking part in professional football must meet the ‘break-even’ requirements.

Currently, salary caps do not exist in major sports leagues in Germany. However, several plans to implement these in some form have been discussed in recent years.

Dispute resolution

Jurisdiction

Who has jurisdiction over the resolution of professional sport disputes in your jurisdiction, and how is this determined?

Generally, professional sport disputes fall within the regular legal jurisdiction. However, most of the relevant sports governing bodies have established arbitration regimes.

Therefore, in most cases where a club, an association or a player is involved, any sports-related disputes or claims are dealt with by specific arbitration courts that apply the respective arbitration rules. The arbitration court must be provided for in the statutes of the association or the club and must be independent of the association or club.

Enforcement

How are decisions of domestic professional sports regulatory bodies enforced?

The enforcement of the decisions of specific arbitration courts (see ‘Jurisdiction’) is carried out by the regulatory bodies themselves. The detailed workings of this enforcement depends on the individual sports body and on the nature of the arbitration regime (see ‘Court enforcement’).

Court enforcement

Can the decisions of professional sports regulatory bodies be challenged or enforced in the national courts?

Only in cases where a decision of a sports arbitration court is based on a major breach of procedural rules can the decision be challenged in a national court. An exhaustive list of these cases is found in paragraph 1059 of the German Civil Procedure Code. Paragraph 1059 only applies, according to paragraph 1066, however, to decisions made by the ‘true’ arbitration courts, which are arbitration courts made up of external arbitrators. ‘False’ arbitration courts, also known as internal arbitration courts, are those made up of arbitrators from within the institutional body that established the arbitration court.

In certain urgent instances, the regular courts may also have jurisdiction over a matter originating in sports law.

Sponsorship and image rights

Concept of image rights

Is the concept of an individual’s image right legally recognised in your jurisdiction?

Image rights are protected under German law as part of the individual’s personality rights. The right to one’s own image stems partially from the German Act on Copyright in Works of Visual Art and Photography and from constitutional law. There is no register of image rights.

In general, the athlete’s consent is required for any use of a picture of him or her unless the picture is being used for reporting purposes in the media. This consent is mandatory if the picture is used for commercial purposes.

Commercialisation and protection

What are the key legal considerations for the commercialisation and protection of individuals’ image rights?

The commercial exploitation of a person’s image rights must be consented to by the person. This applies not only to the image itself but also to some aspects of the person’s personality rights (his or her name, voice, etc). An unlawful use of these rights entitles the person to seek a cease-and-desist order and to sue for damages and information on the specifics and the details of the respective usage of the infringed rights to be in a position to calculate the amount of damages, which is especially dependent on the extent of the usage.

How are image rights used commercially by professional organisations within sport?

The use of an athlete’s image rights in Germany is restricted to a certain extent because athletes do not normally grant these licences directly to professional organisations. Direct licences to exploit their image rights are usually granted by the players to the clubs or league organisations they play for. These licences are then transferred by the clubs or league organisations to the professional organisations.

However, the sublicences then held by the professional organisations are not without restrictions either. In many cases, the sponsorship of the player’s club clashes with the sponsorship of the organisation for which the player plays. In these cases, the club or the league organisation has to come to an agreement with the professional organisation to settle their opposing interests.

The commercial exploitation of a player’s image rights therefore depends on the agreement of the organisation with the club or league organisation. It also depends on the extent of the licence granted by the player to the club to exploit his or her image rights in accordance with the applicable legal provisions.

Morality clauses

How can morality clauses be drafted, and are they enforceable?

Owing to the principle of freedom of contract in Germany, morality clauses can be included in a sponsorship contract; however, they need to be negotiated individually and cannot be drafted as standard terms and conditions of the contract. If implemented as standard terms and conditions, the clause will be held legally void on the basis of paragraph 307 of the German Civil Code (BGB). In addition, the morality clause has to be directly connected to the sponsorship obligations of the individual.

If the clause is included in the correct manner, a breach of the provisions of it can be enforced through a contractual penalty or by a termination of the contract with immediate effect.

Restrictions

Are there any restrictions on sponsorship or marketing in professional sport?

There are no restrictions in Germany regarding the sponsorship of alcohol or gambling brands as long as it does not involve the sponsorship of illegal gambling practices.

The sponsorship of tobacco products is prohibited in general under EU law (Directive 2003/33/EC) and under German law (paragraph 19 of the Tobacco Products Act). Additional rules of the Interstate Gambling Treaty may also apply.

Age-related restrictions only exist with respect to minors (persons under 18), who in general can only conclude contracts with the consent of their legal guardians (paragraph 107 of the BGB).

Brand management

Protecting brands

How can sports organisations protect their brand value?

The easiest and most common way for sports organisations to protect their brand value is by seeking trademark protection for their brand. Protection is available for logos and word signs (including abbreviations) as long as the designation to be protected enjoys original distinctiveness (paragraph 8 of the German Trademark Act or article 7 of Regulation (EU) 2017/1001 on the European Union trademark). By seeking trademark protection, brand owners can further ensure that only authorised licensees (eg, broadcasting companies, official sponsors and partners) are able to use the protected logos and words.

How can individuals protect their brands?

As in the case of sports organisations, individuals are also able to protect their brand by seeking protection of their name as a word or logo. There are high legal hurdles for obtaining this word protection in Germany because in most cases the individual’s name lacks the distinctiveness needed for the protection. But by creating a specific logo, the logo may be eligible for trademark protection and may later be licensed to partner companies for merchandising purposes.

Cybersquatting

How can sports brands and individuals prevent cybersquatting?

In addition to the enforcement of their trademark rights, sports organisations and branded individuals can rely on their name right pursuant to paragraph 12 of the BGB to prevent cybersquatting. The name right provides the holder of it with protection similar to trademark protection, and is particularly helpful in disputes concerning domain registrations or impersonations.

Media coverage

How can individuals and organisations protect against adverse media coverage?

Because of the constitutional freedom of the press anchored in the German constitution (article 5 of the Basic Law (GG)), there is little room for protection from adverse media coverage.

Legal action may be taken in cases where the facts reported are demonstrably false. Possible remedies include cease-and-desist orders, and the right to reply or to present counterarguments. These remedies are only possible, however, if the press coverage is demonstrably false.

Coverage that is simply negative or unfavourable is constitutionally protected in Germany. There are, therefore, very few ways of protecting oneself from negative media coverage from a purely legal point of view.

Broadcasting

Regulations

Which broadcasting regulations are particularly relevant to professional sports?

There is a variety of legislation at both the federal and federal-state levels that regulates the general rights and obligations of broadcasters and the content broadcast by them. In addition to specific legislation dealing with the protection of minors, the most relevant provisions for professional sports authorities are found in the Interstate Broadcasting Treaty (RStV).

The RStV also contains very specific provisions on advertising, the basic principles of which are found in paragraph 7, as well as a white list for certain events that must be broadcast free-to-air, which is in paragraph 4.

The most prominent examples of white list events are certain FIFA World Cup games and some competitions of the Summer and Winter Olympic Games.

Restriction of illegal broadcasting

What means are available to restrict illegal broadcasting of professional sports events?

The most common way to block unauthorised live streaming on online platforms is to contact the platform providers and inform them about the unlawful nature of the content. To restrict access to the stream, it will be protected by safety measures and only available to licence holders.

What has to be kept in mind, however, is the Portability Regulation of the European Union, Regulation (EU) 2017/1128 on cross-border portability of online content services in the internal market.

The goal of this Regulation is to ensure that consumers are able to use the online content that they have acquired in one country in all member states of the European Union. This results in a set of rules according to which providers of paid-for online content services (such as online movie, TV or music streaming services) have to provide their subscribers with the same service in all other member states as in the member state of residence of the customer.

Event organisation

Regulation

What are the key regulatory issues for venue hire and event organisation?

In addition to the basic provisions of the BGB on the renting of an event location, special attention must also be paid to security measures. These include the observance of safety standards and fire protection standards. Because of the numerous regulations that exist at both the local and federal-state levels, it is advisable to contact all of the relevant public authorities at the earliest stages of the organisational process to ensure that all of their requirements are being satisfied as early as possible.

Ambush marketing

What protections exist against ambush marketing for events?

The best way to protect against ambush marketing is to obtain trademark protection for the event being organised. This may enable an event organiser to ensure that only authorised licensees are able to advertise during the event. Another very good way to combat ambush marketing is to force the athletes to agree to prohibit their private sponsors from using them in advertising spots during the event, in particular, to refrain from using the logo of the event the athlete is competing in (see, for example, Rule 40 of the Olympic Charter).

In cases where the ambush marketing is too aggressive, a last resort in Germany would be to bring an action based on the Unfair Competition Act in the case of third-party advertising during the event.

Ticket sale and resale

Can restrictions be imposed on ticket sale and resale?

Yes. However, because the provisions of the BGB apply to the standard terms and conditions of sale and resale of the tickets, the careful wording of these terms and conditions is of utmost importance. The legal test is whether these standard terms and conditions unjustly restrict the ticket holder, which means they must be drafted in a way that avoids this.

Immigration

Work permits and visas

What is the process for clubs to obtain work permits or visas for foreign professional athletes, and coaching and administrative staff?

There are different ways for clubs to obtain work permits or visas for foreign athletes and for the coaching and administrative staff depending on the nationality of the individual persons. Because of the unrestricted freedom of movement of workers in the EU, EU nationals are not subject to any restrictions regarding work permits. They do not need to obtain residence permits, nor do they have any reporting obligations if their stay in Germany does not exceed three months.

Nationals from countries outside the EU must obtain a residence title (eg, visa, residence permit, EU Blue Card). This can be applied for at the consulates or embassies in the individual’s home country before coming to Germany. Depending on the home country, it may even be applied for at a German Agency for Foreigners after entering Germany. Paragraph 18(2) of the Residence Act lays down the general necessity of also obtaining the approval of the Federal Employment Agency (BA) if working in Germany is involved.

What is the position regarding work permits or visas for foreign professional athletes, and coaching and administrative staff, temporarily competing in your jurisdiction?

For foreign professional athletes and for coaching or administrative staff members from countries outside the EU who are temporarily competing or working in Germany, the relevant regulations on the necessity of obtaining a residence permit are found in paragraphs 17 and 37 of the Residence Regulation (AufenthV). Although the general rule is that foreigners must obtain residence permits, paragraph 17(2) of the AufenthV provides an exception to this. If a foreigner is employed for less than 90 days during a 12-month period, he or she does not need to obtain a residence title as long as the requirements of paragraph 22(4) of the Regulation on the Employment of Foreign Nationals (BeschV) are complied with (see ‘Residency requirements’).

Residency requirements

What residency requirements must foreign professional athletes, and coaching and administrative staff, satisfy to remain in your jurisdiction long term or permanently?

Foreign professional athletes can obtain residence permits without the approval of the Employment Agency if they fulfil the requirements set out in paragraph 22(4) of the BeschV. This paragraph states that a foreign athlete or coach must be older than 16 and must be part of a sports association that pays a gross salary of at least 50 per cent of the income threshold of the social security scheme. In addition, the competent umbrella organisation must confirm the athlete’s or the coach’s sporting qualifications. In certain sports, these qualifications depend on the athlete’s participation in the top leagues (eg, section 10 No. 2.6 of the German Football Association regulations). The residence permit issued is linked to the purpose of the person’s stay (eg, to the particular sporting event of a professional athlete). It can therefore only be valid for a restricted period of time. The work permit can also be conditional (eg, conditioned on the person qualifying for an athletic event or on the employing club remaining in a certain division). A general work permit is not required if the athlete or coach satisfies the residence permit requirements set out in paragraph 22 of the BeschV.

Do the family members of foreign professional athletes, and coaching and administrative staff, legally resident in your jurisdiction have the same residency rights?

The right of residency of the family members of foreign athletes or coaches does not differ from those applicable to the relatives of other employees. The basic right arises from paragraphs 27 to 36a of the Residence Act.

Sports unions

Incorporation and regulation

How are professional sporting unions incorporated and regulated?

The role played by trade unions in the area of sports is a relatively new phenomenon in Germany. In 2017, the German Athletes Association, a trade union for all athletes, was founded. Its aim is to protect athletes’ rights, independently of the German National Olympic Committee (NOC). The German Athletes Association is financially supported by the German parliament and the Federal Ministry of the Interior. In addition, some sports have their own collective organisations, for example the VDV, Germany’s professional footballers’ association.

Most trade unions in Germany are organised in the form of registered or unregistered associations. Their by-laws generally contain clauses allowing them to enter into negotiations on collective bargaining agreements (paragraph 2 of the Act on Collective Bargaining Agreements).

Membership

Can professional sports bodies and clubs restrict union membership?

No. There are very specific and very strict regulations regarding the rights of trade unions under German labour law. Every worker has the fundamental right of association, namely, the right to be a member of an organised trade union. This right of association is also anchored in the German constitution (article 9 of the GG).

Strike action

Are there any restrictions on professional sports unions taking strike action?

If professional athletes were to be organised in trade unions, these trade unions would be subject to the same strike restrictions that other trade unions are subject to. Strikes would therefore only be permitted in specific, exceptional circumstances - for example, if both sides are in dispute regarding the terms of the collective bargaining agreement. But, as mentioned in ‘Incorporation and regulation’, this is a very new topic in Germany.

Employment

Transfers

What is the legal framework for individual transfers? What restrictions can be placed on individuals moving between clubs?

The relationship between professional athletes and their clubs is based on employment contracts entered into by the parties, as set out in paragraph 611a of the BGB. Therefore, when a player is transferred, the player’s employment contract with the former club has to be terminated and an employment contract with the new club entered into. Although the employment contract can, in general, place restrictions on the individual, these restrictions are limited by paragraph 138 of the BGB. This paragraph states that any legal transaction contrary to public policy is void. Additional restrictions can arise from other sources, such as the UEFA Club Licensing and Financial Fair Play Regulations, transfer bans imposed on the club and the Regulations on the Status and Transfer of Players. Further restrictions for minors exist (see article 19 of the FIFA Regulations on the Status and Transfer of Players).

Ending contractual obligations

Can individuals buy their way out of their contractual obligations to professional sports clubs?

In light of the principle of pacta sunt servanda, individuals are usually not allowed to buy their way out of the contractual obligations owed to their professional sports clubs. One way around this, however, would be to include a buy-out clause in the employment contract. Another way to mutually end the contractual relationship is to enter into an agreement to terminate it.

Welfare obligations

What are the key athlete welfare obligations for employers?

The employer’s duty of care includes a wide range of obligations regarding the safeguarding of the welfare of the employer’s athletes (employees). One example is found in paragraph 618 of the BGB, according to which the employer is obligated to safeguard the safety and health of the employees. The employer must therefore instruct and inform its employees, take care of the belongings they bring with them and protect their basic personal rights.

Young athletes

Are there restrictions on the employment and transfer of young athletes?

The employment of minors is restricted under the Act to Protect the Employed Youth (JArbSchG) and under the Child Labour Protection Regulation (KindArbSchV). The aim of these statutes is to protect young people under the age of 18 from work that is too difficult, too dangerous or unsuitable for them. Special provisions of a federation may also apply, such as article 19 of the FIFA Regulations on the Status and Transfer of Players, which prohibits the international transfer of minors, apart from in exceptional cases.

What are the key child protection rules and safeguarding considerations?

As stated above, the key child protection rules in Germany are found in the JArbSchG and the KindArbSchV. The former contains special stipulations regarding the number and length of work breaks and leisure time, and it also limits the number of working hours for underage employees. Section 8(1) of the JArbSchG states that minors are only allowed to work eight hours per day, 40 hours per week, and between the hours of 6am and 8pm. There is no explicit exemption in sports law from these requirements. However, it is currently being discussed whether article 14(7) of the JarbSchG, which states that in the field of media and arts minors are allowed to perform until 11pm, applies to athletes. The duty of care the employer owes to minors is more comprehensive than for adults.

Club and country representation

What employment relationship issues arise when athletes represent both club and country?

Athletes that represent both their clubs and their countries still have contractual relationships with their clubs. Clubs are obligated to send their registered players to their national teams and the players are obligated to accept invitations from national teams. During their time with their national team, players continue to be paid by their clubs, which are also responsible for insuring them. Any bonuses paid by the national associations to the national players are done on a voluntary basis. Therefore, the clubs still bear the major risk (eg, injuries) during the games with the national teams. Although a system of remuneration for the clubs exists, conflicts often arise between the national associations and the clubs with respect to who is liable for a player’s injuries. From a legal point of view, the club’s obligation to send the players to the national teams is questionable at least from an antitrust point of view, as it could be perceived as an abuse of a market-dominating position.

Selection and eligibility

How are selection and eligibility disputes dealt with by national bodies?

Athletes who meet the specific selection requirements can claim their proposals for selection from their respective sporting associations. Based on these proposals, the German Olympic Sports Federation, which is recognised by the International Olympic Committee (IOC) as the NOC in accordance with article 44.2 of the Olympic Charter, is competent to submit entries for competitors at the Olympic Games. The IOC, in a third step, is competent to authorise the submitted entries. Appeals brought by an athlete against an unlawful nomination will generally be dealt with by an arbitration court, provided that an arbitration clause exists. If this clause does not exist, the state courts have jurisdiction to settle the dispute.

What are the key taxation issues for foreign athletes competing in your jurisdiction to be aware of?

According to paragraph 1(1) of the German Income Tax Act (EStG), athletes are subject to income tax if they reside in Germany (paragraph 8 of the Tax Code) or if their habitual residence is in Germany. According to paragraph 9 of the Tax Code, an athlete’s habitual residence is in Germany if he or she resides there for more than six months in a given calendar year, whereby short-term interruptions are irrelevant. The income categories in paragraph 2(1) of the EStG are listed according to sources of income, which include commercial income, income from self-employment or income from dependent employment. The income from the different sources is subject to different taxation rules. These rules determine how, when and at what rate the income is to be taxed. This calculation is based on the total worldwide income of the athlete residing in Germany. Double taxation of income earned outside Germany (which is also taxed in the foreign country) is generally avoided on the basis of paragraph 34c of the EStG or on the basis of double taxation treaties with the foreign countries. For foreign athletes who do not reside in Germany, only the income that has a special domestic connection to Germany is taxable (paragraph 49 of the EStG).

Update and trends

Key developments of the past year

Are there any emerging trends or hot topics in your jurisdiction?

Hot topics37 Are there any emerging trends or hot topics in your jurisdiction?

Sports federations are increasingly subject to antitrust scrutiny from competition authorities (eg, for having an unsanctioned events rule). Far from being purely theoretical, the threat of foreclosure for new market entrants is a real concern.

In addition, in professional football leagues the ‘50+1’ rule (meaning that a financial investor is, in principle, not allowed to govern the football club) is still a hot topic, along with the discussion on whether football clubs should participate in funding police operations in conjunction with football events.