What is the regulatory governance structure in professional sport in your jurisdiction?
The UK government has adopted a non-interventionist approach to sport and there is no general law of sport. Instead, the regulation of individual sports is largely left to their national governing bodies (NGBs), which are autonomous bodies whose authority derives from a voluntary agreement between the NGB and its members, with the government only intervening where it is deemed in the public interest to do so. One such example is the Football Spectators Act 1989, which, as a result of the findings of the Lord Justice Taylor’s report into the Hillsborough disaster of April 1989, ensured that all clubs in the top two tiers of English professional football would be required to provide all-seated accommodation at stadiums in an effort to improve safety and assist with crowd control.Protection from liability
To what extent are participants protected from liability for their on-field actions under civil and criminal law?
Participants in sport do not enjoy blanket immunity from criminal or civil sanctions for their actions while participating in sport.
In a civil context, participants in professional sport owe a duty of care to one another, meaning they must not act negligently, recklessly or with the intention to cause harm, but must instead exercise reasonable care in all circumstances. The precise nature and scope of that duty of care will differ according to the rules and characteristics of the sport in question. Unless a sport has a specified dispute mechanism by which its participants are bound, then its participants will be entitled to pursue civil claims against one another for any damages suffered (ie, personal injury claims).
In a criminal context, there is a general concept of implied sporting consent, providing sporting participants who commit dangerous acts (that might otherwise give rise to criminal liability) an exemption to being charged, provided the act in question falls within the boundaries of what could reasonably be expected in their sport. Even acts that breach of the rules of the sport may nevertheless be consented to if they fall within the practices of the sport, a concept widely referred to as the ‘playing culture’ of a sport.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 regulatory framework for doping matters in the UK is based on the World Anti-Doping Agency (WADA) Code, which is the global platform for anti-doping regulation alongside the Court of Arbitration for Sport (CAS) as the ultimate arbiter of the WADA Code’s interpretation and application.
Outside the regulatory framework, there may be secondary liability under civil law (eg, a doping offence may constitute a breach of a sponsorship or endorsement contract). At present, the UK does not have any anti-doping specific criminal law; however, individuals can be liable for using illegal substances under the general norms of criminal law.Financial controls
What financial controls exist for participant organisations within professional sport?
There are no statutory controls within the United Kingdom that apply specifically to sport, and most sports organisations are subject to the usual accounting rules and financial controls that apply more generally under company law.
Various NGBs in the United Kingdom have, however, introduced financial controls within their own rules. In football, both the Premier League and English Football League have introduced forms of financial fair play, targeted at reducing clubs’ financial losses. Other sports have introduced salary caps to control costs, setting limits on the total outlay organisations can spend on players’ salaries. This includes Premier League Rugby, English County Cricket and the Women’s Super League in football.
Who has jurisdiction over the resolution of professional sport disputes in your jurisdiction, and how is this determined?
There is no single authority or body in the UK that automatically has jurisdiction over sporting disputes. The question of which authority or body is tasked with resolving the dispute will depend upon the precise nature of the dispute in question.
A regulatory or disciplinary offence by a participant will usually fall to be determined by a disciplinary committee (or similar body) pursuant to the relevant NGB’s rules. Where a dispute falls outside this sphere and is akin to disputes of a civil nature (eg, breach of contract claims), the majority of NGBs require participants to resolve disputes by way of arbitration. NGBs ensure this is the case by including a valid arbitration clause in their rules that meets the definition of an ‘arbitration agreement’ under sections 5 and 6 of the Arbitration Act 1996 (the 1996 Act).
Should a sporting participant attempt to resolve a dispute falling within the scope of an arbitration agreement by way of court proceedings, then the respondent or defendant may seek a stay of the proceedings pursuant to section 9 of the 1996 Act.
There will, however, be certain sporting disputes that fall outside of the scope of an arbitration agreement, thereby allowing them to be litigated in the civil courts, though this will depend on the precise facts of the case or the nature of the relief being sought by the claimant.Enforcement
How are decisions of domestic professional sports regulatory bodies enforced?
Decisions against participants within a sport are often enforced through restrictions on the participant’s involvement in the relevant sport under the sport’s rules. Sports clubs and athletes can be ineligible to compete in competitions affiliated with the relevant NGB for a designated period or indefinitely, or made to pay financial penalties, or both. Failure to comply with a decision can result in further sanctions within the sport. Similarly, non-competing participants within a sport could be prohibited from conducting business or commercial activities with participants within the relevant sport.
Where the decision by a regulatory body has been made by a tribunal constituted pursuant to a valid arbitration agreement, then the award made by that tribunal is final and binding on the parties to it and can be enforced in the same manner as a judgment or order of the court to the same effect (pursuant to section 66 of the 1996 Act). This can include applying for charging, third-party debt or attachment of earnings orders.Court enforcement
Can the decisions of professional sports regulatory bodies be challenged or enforced in the national courts?
The rules of sports NGBs will (or should) contain detailed disciplinary regulations confirming how any regulatory or disciplinary sanctions are imposed upon participants within the sport, along with a clearly defined appeals process allowing participants to challenge any first instance decision. In the event that the appeal body subsequently upholds (in whole or part) a first instance decision, the basis upon which the disciplinary sanction can be challenged depends upon the content of the NGB’s rules and the precise nature of the disciplinary commission that imposed the disciplinary sanction. Where the committee is not an independent arbitral tribunal, the civil courts will be able to review the commission’s decision to ensure that an NGB has operated within its lawful limits. A court will do so by reference to the same grounds for review the Administrative Court would apply to the decisions of a public body (eg, the manner in which the decision was made and how it was reached, while considering wider public policy considerations, rather than reinvestigating the factual and evidential basis upon which the decision was made). A court will have the power to grant declarations and injunctions where the decisions of a disciplinary body affect a person’s right to work.
Where a respective NGB’s appeal procedures constitute valid arbitration, a court is unable to further consider the lawfulness of a decision. In this instance the participant’s ability to challenge a decision is limited to the following grounds set out in the 1996 Act: (i) the tribunal lacked substantive jurisdiction; (ii) the award was affected by a serious irregularity; or (iii) the award was appealed on a point of law. See 'Enforcement' for further details.
Sponsorship and image rightsConcept of image rights
Is the concept of an individual’s image right legally recognised in your jurisdiction?
While commercial arrangements relating to the use of individuals’ image, fame and reputation are commonplace (eg, for promotional activities or the creation of branded products), English law does not recognise a distinct concept of an ‘image right’ that is capable of ownership or registration.
Instead, a piecemeal approach is adopted, whereby contractual arrangements and a range of statutory and common law causes of action are relevant for individuals who are seeking to protect or exploit their image rights (or both) and, in particular, prevent unauthorised use of their image (eg, in promotional materials, on or in products or services). For these purposes, it is generally considered that ‘image’ or ‘image rights’ comprise rights connected to an individual for commercial or promotional purposes including his or her name, nickname, photograph, signature, likeness, logo and similar.Commercialisation and protection
What are the key legal considerations for the commercialisation and protection of individuals’ image rights?
One of the first considerations is whether or not the individual will establish an image rights structure, whereby the individual’s image rights are owned or controlled through one or more corporate entities as opposed to by the individual personally. Tax considerations will form a crucial part of any such structuring.
Preventing unauthorised use of individuals’ image rights is also of crucial importance, including enforcement of any legal rights that may apply to provide protection to the relevant individual and their rights. This is most likely to occur through actions for breach of contract, passing off and trademark infringement. Depending on the individual and the nature, strength and strategy around their brand and image, this could be done reactively when issues arise, or there could be a more proactive monitoring and enforcement of the individual’s rights.
Care should be taken to ensure that where third parties are authorised to use an individual’s image, the terms of authorisation are carefully defined and documented to provide appropriate control and protection for the individual. In particular, thought should be given to the relevant products, services and brands to which such rights are granted, any exclusivity, rights of approval for the individual over the use of their image, morality or reputation-based conditions and relevant termination rights, along with the applicable financial arrangements (which may include royalties or revenue shares in the event of licensed products or services being relevant).
A key issue at all times is to ensure the ‘fit’ and consistency of different arrangements and the commercial programme as a whole, taking into account existing arrangements at any particular time as well as protecting potential future opportunities.
How are image rights used commercially by professional organisations within sport?
Professional organisations normally utilise image rights for marketing and promotional purposes, including the promotion of the organisation itself and its activities (eg, ticket sales) and use on or in any products and services offered (eg, branded merchandise).
Organisations may also seek to commercialise these rights with third-party partners and sponsors, with the use of images and the making of appearances by individuals often a key feature of sponsorship or partnership arrangements. This content may then be used by the third party to promote its association with the organisation, its own business, or for creating branded products or services.
The terms of the relevant acquisition of the rights will determine the extent and scope of the organisation’s exploitation of such rights - it is crucial that the acquisition arrangements are consistent so that the organisation only exploits the rights that it has acquired. Various considerations apply in this regard, including whether the rights are acquired in a personal or organisation-specific context, whether exploitation must be in conjunction with other individuals, and other commercial provisions that may be agreed between the parties.Morality clauses
How can morality clauses be drafted, and are they enforceable?
Morality clauses seek to define the type of behaviour that is prohibited by a party, the impact of such behaviour and the related consequences. Provisions in favour of an organisation associated with an athlete are increasingly common and topical (though it should be noted that many athletes may also seek reciprocal protections from entities or brands with whom they have a commercial relationship). The parties will generally approach the issue from opposing positions, with brands seeking wide protection against potential reputational damage from association with an athlete, whereas the athlete will seek limit such provisions as far as possible, to avoid a wide and potentially subjective provision that risks the athlete being in breach of an agreement and liable for damages or at risk of the arrangement being terminated. The specific drafting of such clauses tends to be bespoke, depending on the particular brand, athlete and circumstances.
Morality clauses are subject to the ordinary principles of law in respect of their enforceability. On the face of it, a commercially agreed morality clause resulting from an arm’s-length negotiation between two appropriately advised parties will be enforceable.Restrictions
Are there any restrictions on sponsorship or marketing in professional sport?
There is a range of restrictions on sponsorship and marketing in connection with professional sport and this is a fluid area that is subject to ongoing change and evolution. While certain sport-specific restrictions may be imposed, generally by NGBs, the most widely applicable restrictions are government-backed rules and regulations managed by regulatory bodies, such as the Advertising Standards Agency or the Office of Communications (Ofcom), that each have individual codes of practice affecting marketing across various forums, whether through social media, sports broadcasts, print advertising or other promotional activities. Codes can include a wide array of requirements, such as general prohibitions on misleading consumers or restrictions on advertising to children.
The laws and regulations around marketing are particularly stringent around age-based products, such as tobacco, alcohol and gambling, particularly in restricting marketing to minors. By way of example, in the case of gambling, domestic regulations prohibit adverts targeting children, while separately the FA has implemented football-specific rules, including a prohibition on junior and academy club teams featuring gambling sponsors on their kit.
Brand managementProtecting brands
How can sports organisations protect their brand value?
Branding is key to sports organisations establishing a strong identity, creating a fan base and generating income. Trademarks are particularly important for protecting brand identity. Sports organisations may register trademarks to protect their name, crests and logos. Various remedies are available for unauthorised use of registered trademarks, including damages, injunctive relief and orders for delivering up infringing material. The law of ‘passing off’ in the United Kingdom also provides some protection against unauthorised use of unregistered marks.
Copyright is another valuable intellectual property right. In sport, copyright subsists in a range of original material such as books, articles, blogs, film and other visual footage, all of which can increase brand value.
Registering a domain name or names is another form of brand protection, putting a sports organisation at the fore on related internet searches, while social media and technology offer sports organisations further digital opportunities to build their brand. By engaging with platforms such as Twitter and Facebook, or creating an app, organisations can have a global reach. However, organisations will need to ensure regular monitoring of their digital and media presence and more generally in the public domain, taking appropriate legal action where necessary to protect their brands.
Sponsorship provides another key way to enhance brand value. Sports organisations should carry out due diligence on prospective partners to ensure they are not brought into disrepute by association with any such companies. Carefully drafted sponsorship contracts are important to ensure an organisation’s brand is well protected, particularly around each partner’s use of the sponsorship rights granted.
How can individuals protect their brands?
Individuals can generate significant public acclaim through their sporting performance, leading many to become brands in their own right. In many respects, the protections of such brands mirror those of companies, such as registration of trademarks (eg, individual logos); passing off claims to protect against unauthorised use of their name, likeness or other personal attributes; registration of domain names; and other brand-building through social media and online. Individuals who engage directly on social media will need to be aware of the risk of reputational damage through such activities, in particular ensuring that any comments or posts they make on social media are appropriate and not controversial. Sportspersons and their representatives should also monitor media content for any defamatory material. Cease-and-desist or take-down notices, or other forms of legal action, such as pursuing a defamation claim, are some of the legal options available to protect an individual’s brand.
Many sportspersons derive substantial income from endorsement and sponsorship deals and therefore choosing the right companies or products to be associated with is key along with ensuring that any endorsement or brand ambassador arrangements are not overly restrictive on the individual’s ability to pursue other commercial opportunities. An individual’s image rights structure and commercialisation can form a significant part of this (see 'Concept of image rights' and 'Commercialisation and protection').Cybersquatting
How can sports brands and individuals prevent cybersquatting?
Where a domain name is registered using a registered trademark, the trademark owner may have a case of trademark infringement; otherwise, there is no automatic right in the United Kingdom for an individual or a company to a domain name containing his or her name.
For new companies, one way of preventing cybersquatting is to determine the most relevant domain names for the business and then purchase these key domains prior to registering the company. However, as it would not be cost-effective to purchase every single domain name that may be associated with a company, there is always likely to be some degree of risk of cybersquatting occurring. For existing businesses, they may wish to purchase key domain names containing a brand name prior to launching any new product or service. Once a company name and its brands, products and services are in the public domain, the likelihood of cybersquatting will increase.
When dealing with cybersquatting, it is important to identify the owner of the disputed domain, which can usually be obtained by searching the WHOIS database of registered domains operated by the Internet Corporation for Assigned Names and Numbers (ICANN). Businesses and individuals may wish to negotiate directly or through their legal advisers with the owner for the transfer of the disputed domain. Cybersquatters are likely to demand a fee. Alternatively, several organisations, such as Nominet (which administers .uk domains) and ICANN, operate a dispute resolution procedure that can be used to challenge domain name registrations.Media coverage
How can individuals and organisations protect against adverse media coverage?
While any individual or organisation in the public eye can experience adverse media coverage, the world of sport attracts particularly significant media scrutiny. This can vary from fair scrutiny to coverage that is ill-informed or inaccurate. Claims may be brought where such content is deemed to be defamatory.
Individuals’ and organisations’ compliance with applicable laws and regulations in respect of their day-to-day activities provides the most obvious protection against adverse media coverage. Organisations should also ensure their employees are aware that their actions and behaviour (both on and off the pitch) may inadvertently reflect on the organisation’s reputation and brand. Morality clauses can provide some protection in this regard (see 'Morality clauses').
Other tools include putting in place appropriate confidentiality agreements when undertaking or negotiating potential future arrangements with third parties; ensuring any commercial contracts include robust confidentiality provisions; dealing with threats to publish allegations or commercially sensitive information expeditiously; regular online and offline reputation monitoring; and legally challenging untrue or defamatory content in the media to secure its removal and prevent wider publication.
Which broadcasting regulations are particularly relevant to professional sports?
The EU’s Audiovisual Media Services Directive provides the overarching framework for broadcasting regulation within the EU. The Directive covers a broad array of issues, including sponsorship and advertising, the use of visual extracts by news organisations in event reports and the protection of public access to certain sporting events. Compliance within the United Kingdom is currently monitored by Ofcom, which has the power to implement various rules and codes of practice. This includes the Ofcom Code on Sports and Other Listed and Designated Events, known as the ‘listed events’. This defines which events must be made available on free-to-air channels and those that may be shown exclusively on pay-television, provided that sufficient secondary coverage is provided on free-to-air television.
Further obligations apply under Ofcom’s wider Broadcasting Code (the Code), covering, among other items, the use, format and delivery of any sponsor credits in connection with a broadcast, use of virtual advertising, and the length of advert breaks. Perimeter and background advertising at venues that appears on a broadcast will also be subject to the Code as well as the UK Code of Broadcast Advertising. Ofcom has the power to impose a financial penalty on any licensees for non-compliance.
Beyond broadcasting-specific regulations, the wider impact of competition law is unavoidable, affecting almost all elements of broadcasting, whether it be the collective sale of broadcasting rights, tender processes, exclusivity arrangements, blackout rules, territorial rights and overseas distribution. The cessation of Sky’s monopoly on the Premier League rights provides a distinct example of its impact.Restriction of illegal broadcasting
What means are available to restrict illegal broadcasting of professional sports events?
While under UK law there is no fundamental proprietary right in sporting events per se that broadcasters and event hosts can enforce against illegal broadcasters, event organisers will be able to restrict illegal broadcasting through their control of event access and the terms of entry. This allows organisers to limit access to approved broadcasters and prevent illegal broadcasting through either the threat of breach of contract claims against attendees who seek to illegally film and broadcast the event, or by simply ejecting such individuals from an event. Policing this for all attendees can be problematic given the advent of smartphones and therefore many organisers and broadcasters will seek to target the major sources of transmission of illegal broadcasts.
In particular, broadcasters can seek to enforce rights under copyright over the contents of their broadcasts (including the graphics and overlay that form part of the broadcasts), seeking injunctions under the Copyright, Designs and Patents Act 1998, as recently used by both UEFA and the Premier League to require internet providers to block illegal streaming sites.
Industry bodies such as the Federation Against Copyright Theft have also been working with authorities to target illegal broadcasting occurring through the use and sale of illicit streaming devices (colloquially known as Kodi boxes). Prosecutions have been brought against sellers of the boxes as well as venues who have used the devices to show live sports illegally.
What are the key regulatory issues for venue hire and event organisation?
Event organisation and hosting in modern sporting events often involve major operations, and organisers therefore need to ensure they are aware of potential liabilities and consider how they can mitigate related risks where possible.
Event organisers can be civilly liable to both event attendees and event participants. The Occupiers' Liability Act 1957 sets out the duty occupiers or controllers of any premises have to ensure entrants are reasonably safe while inside their premises.
There is a further plethora of health and safety requirements under statute and local licensing laws with which an event organiser must comply, including the Safety of Sports Grounds Act 1975, which subjects the owners of large sports grounds (over 10,000 capacity) to a comprehensive scheme of licensing and control, while further laws cover disabled access, the sale of alcohol and compliance of any promotional activities with advertising laws.
Organisers must also consider any potential NGB requirements, such as the venue set-up, which can cover seating specifications, in-venue branding and advertising, as well as access and facilities for media and competition officials.Ambush marketing
What protections exist against ambush marketing for events?
As noted in 'Protecting brands', trademark, copyright laws and potential passing off claims can provide events with some protection around the use of their branding.
Ambush marketers may also fall foul of advertising codes of practice and consumer laws, though these often require formal complaints to be made to relevant regulators, rather than enabling a direct action against the ambusher.
Event organisers can also protect against ambush marketing through various contractual means. Ensuring that venues are provided ‘clean’ (ie, without pre-existing advertising) and that broadcasters only advertise official sponsors. Other protections can include buying up advertising space around the event to prevent ambush marketing in close proximity and, in what is in many ways the greatest protection, through the creation of unique or distinct elements of the event brand such that there is a distinct difference between official sponsor promotions and marketing by unassociated entities.
The government has on occasion introduced bespoke legislation specifically designed to limit ambush marketing. This was the case for both the London 2012 Olympics and the Glasgow 2014 Commonwealth Games (albeit these were federation hosting requirements).Ticket sale and resale
Can restrictions be imposed on ticket sale and resale?
English law does not generally impose any restriction on ticket resale and for the most part people are free to buy and sell their own property. However, growing public anger at the effects of ticket touting and regular press coverage of the issue have led the government to introduce additional consumer protections. These have included specific information that must be provided on any ticket sale or resale and introducing a criminal offence for resellers who use automated technology to purchase large swathes of tickets.
Event organisers can exert some level of control over resale through ticketing terms and conditions of access. By including strict conditions such as non-transferability, requiring photo identification on entry to a venue and the right to cancel tickets if they appear on a reseller website, organisers can restrict the ability of secondary sellers to sell the ticket, with breaches of the conditions potentially rendering the tickets void and worthless.
ImmigrationWork permits and visas
What is the process for clubs to obtain work permits or visas for foreign professional athletes, and coaching and administrative staff?
At the time of writing, athletes, coaches and administrative staff who are EU or EEA nationals have the right to work in the United Kingdom under EU law. This will change following the exit of the United Kingdom from membership of the EU.
Non-EUor non-EEA national athletes and coaches will in most cases need to be sponsored to work in the United Kingdom (although other routes, such as UK ancestry, are available). This requires a club or team to first obtain a governing body endorsement (GBE) from the sport’s NGB as endorsed by the Home Office. A GBE confirms that the NGB considers the athlete or coach to be of the highest calibre in that sport and will make a contribution to that sport in the United Kingdom. Each NGB is responsible for setting the criteria for their sport for an athlete or coach to qualify for a GBE.
Once a GBE has been obtained, the club or team can then sponsor that individual by assigning a ‘certificate of sponsorship’. Thereafter, the individual must apply for a UK visa under either the Tier 2 or Tier 5 category (the former if the individual is from a majority English-speaking country or has passed an English language test and the latter in all other cases). The duration of leave granted will depend on the type of visa the athlete obtains and the length of the individual’s employment contract.
The position differs for administrative staff. They will also likely need to be sponsored to take up employment in the United Kingdom, but whether they can be sponsored will depend on the nature of their role and whether it is deemed by the Home Office to be a ‘skilled job’.
What is the position regarding work permits or visas for foreign professional athletes, and coaching and administrative staff, temporarily competing in your jurisdiction?
‘Non-visa nationals’ do not generally need prior permission or a visa to come to the United Kingdom temporarily to compete in a match, competition or tournament. ‘Visa nationals’ do, however, require a visa for this purpose, which should be obtained before they travel.
The Immigration Rules dictate the length of stay permitted, what payments may be received for participation in such events and the types of activities that can be undertaken in the United Kingdom.Residency requirements
What residency requirements must foreign professional athletes, and coaching and administrative staff, satisfy to remain in your jurisdiction long term or permanently?
How and when someone is eligible for permanent residence will depend on what visa category they are currently in the United Kingdom under. Generally, an individual is eligible to apply for permanent residence status if they have lived in the United Kingdom validly for a continuous period of five years.
However, if an athlete, coach or administrative staff member is absent from the United Kingdom for a significant stretch of time during this five-year period, this may affect their eligibility for permanent residence.
Do the family members of foreign professional athletes, and coaching and administrative staff, legally resident in your jurisdiction have the same residency rights?
Most partners and children who come to the United Kingdom as dependants of the athlete, coach or administrative staff member will share the same residency rights. In addition, some ‘extended’ family members may also be eligible for the same residency rights as their athlete, coach or administrative staff family member under EU law.
There may, however, be certain conditions attached to their leave. For example, dependants of someone who is in the United Kingdom under the points-based system are generally not permitted to take up employment as professional sportspersons (including coaches).
Dependent family members’ rights will generally be conditional upon the athlete, coach or administrative staff family member continuing to be employed in the United Kingdom.
Sports unionsIncorporation and regulation
How are professional sporting unions incorporated and regulated?
Sports unions sit within the same regulatory framework as any other trade union within the United Kingdom and are regulated under various primary laws and supplementary regulations. Unlike registered companies or partnerships, trade unions are not defined through their legal form, but can be constituted and run in various manners. Rather, they are defined by reference to their organisational purpose. The definition of a trade union within Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) is that the organisation’s principal purpose is the regulation of relations between workers and employers or between workers and employers’ associations. The internal governance and conduct of trade unions is generally governed by their own internal rules, which are set collectively by their members.
Under section 3 of TULRCA, the Certification Officer maintains a public list of all trade unions. Entry on to this list acts as evidence that the relevant organisation is a trade union. Once formed, unions can engage in various levels of activism; however, to engage in collective bargaining, unions will require formal recognition. Recognition can be voluntary, where an employer agrees that the union can represent its employees, following which the union and employer will normally draw up an agreement setting out how the arrangement and associated bargaining processes will operate. Where an employer declines to recognise a union, the union can then apply to the Central Arbitration Committee (the UK government body adjudicating on applications for statutory recognition of trade unions for collective bargaining). The latter is a more onerous process and requires the union to also apply for a certification of independence and, as one might expect, can also lead to a more confrontational approach between the union and employer.Membership
Can professional sports bodies and clubs restrict union membership?
UK law makes clear that workers have the right to choose whether or not to be members of a trade union. It is unlawful for an employer to seek to prevent a worker from freely exercising this right. Employers cannot offer workers any inducement not to join a union or take part in union activities. Further, under the Employment Relations Act 1999 (Blacklists) Regulations 2010 (SI 2010/493), it is illegal for employers to compile, supply, sell or use a blacklist of union members for the purpose of discriminating against certain individuals in the recruitment or treatment of workers. Professional sports bodies and organisations cannot, therefore, seek to restrict union membership, for example, by failing to select an individual because of his or her membership.
The only complication in a sporting context is whether an athlete can be considered a worker for the purposes of the relevant legislation. While in many sports an athlete’s status is clear by way of their direct employment by a club, in the case of individuals in sports such as athletics, where funding is often provided by grants from national bodies rather than through a formal employment relationship, it may be less certain as to whether they will be considered a worker under UK law.Strike action
Are there any restrictions on professional sports unions taking strike action?
The laws on industrial action do not enshrine a formal ‘right to strike’ for workers and unions. The ‘right’ is constituted by a mix of contract, tort and statutory law. From a basic standpoint any strike action will be breach of contract by an employee, and a union would be liable under tort for inducing a breach of contract where it has encouraged or supported the strike. However, where strike action is undertaken in accordance with certain statutory procedures, an employer (broadly) has no right to prevent union members from taking industrial action and a union will not be liable under tort for supporting such action. The key statutory provisions are set out within TULRCA and the Trade Union Act 2016, which impose various requirements on unions seeking to organise industrial action, including in particular the proper running of a ballot. Employers will have two potential remedies for any non-compliance with such requirements, either damages, which are capped under statute relative to a union’s membership level (these are considerably lower than the potential losses an organisation may face as a result of any strike action), or an injunction to prevent the strike action, which will serve as the most valuable remedy for any employer.
In addition to the statutory requirements for taking strike action, contractual restrictions on strike action can apply where a union has entered into a collective agreement with an employer containing a ‘no strike’ provision. Such a provision is, however, very unusual and we are not aware of any sports unions in the United Kingdom that have committed to such an agreement as yet.
What is the legal framework for individual transfers? What restrictions can be placed on individuals moving between clubs?
UK law is underpinned by the principle that individuals are free to ply their trade as they choose. In sport, transfer systems broadly arise through the rules of NGBs. Many sports operate a ‘registration’ system where players are required to be registered with their clubs and are only eligible to play for another club following a transfer of their registration, leading to organisations acquiring the right to transfer the registration from another club in order to then enter into a contract of employment with the individual.
Any transfer system imposed by an NGB must still comply with UK employment laws and EU laws on freedom of movement. In the case of the latter, any restriction on an individual’s basic free movement rights is only permissible where justified by a proportionate and legitimate aim. The justification is often made that the regulations help ensure competitive balance, preventing players from leaving a team at any time, which could destabilise an organisation and the relevant league. While various cases have considered free movement in the past, occasionally leading to rule changes within individual sports, uncertainty remains as to whether such restrictions are in fact compatible with UK and EU law.Ending contractual obligations
Can individuals buy their way out of their contractual obligations to professional sports clubs?
There is no statutory mechanism for professional athletes to formally buy their way out of their employment contracts and we are not aware of any attempt (or desire) by any of the major sports NGBs in the United Kingdom to provide such a right within the regulatory framework of their sport. However, individuals and organisations remain free to include bespoke termination rights within a contract whereby an agreement may be terminated on payment of a contractually agreed sum.Welfare obligations
What are the key athlete welfare obligations for employers?
Sports organisations have a legal duty to take reasonable care of their employees’ health and safety (including an employee’s mental health) and to take reasonable steps to provide a safe workplace. The duty arises through tort, statute and as an implied term of an employment contract. Organisations, therefore, need to carefully consider how they can take reasonable steps to protect their employees both on and off the field.
Employers are further required to protect their employees from bullying, abuse, discrimination and harassment. Organisations can be liable for the acts of those in supervisory positions (eg, coaches or managers) and for any failure to address negative actions by an employee’s colleagues. Sports organisations should be aware that these duties are uniform across industries and the fact that certain behaviours may be common within sport (eg, aggressive management styles) will not lower the expected duty of care.
Concerns over athlete well-being led to the Department of Culture, Media and Sport commissioning a Duty of Care in Sport Review, which was published in 2017. The report recommended additional changes to protect athletes, particularly those not formally employed by organisations that are unable to rely on the implied rights thereunder. Recommendations included the appointment of a Sports Ombudsman to hold sporting organisations to account, though many of these changes are yet to be implemented.Young athletes
Are there restrictions on the employment and transfer of young athletes?
Children in the United Kingdom can only work full-time upon reaching the age of 16 and having completed their final school year, and part-time from the age of 13. Children under 13 may only be employed in performance roles requiring a performance licence (including paid sporting activities). Restrictions also apply to the hours children can work relative to their age.
Throughout sport, organisations have recognised the value of securing future talent at a young age and are devoting ever-increasing resources to managing academies and talent scouting to help secure the potential stars of the future. NGBs have recognised the pitfalls of money being thrown at young athletes, many of whom will never make it to the upper levels of professional sport. Many NGBs have therefore sought to implement transfer restrictions to protect minors and ensure that organisations cater for their wider needs, such as their education. In football, for example, the FA, Premier League and English Football League have implemented various rules to police the movement of minors, including preventing players from signing professional contracts until 17, restricting when youth players can move between clubs domestically and preventing intermediaries from receiving monies in connection with youth player registrations and transactions.
What are the key child protection rules and safeguarding considerations?
The government has largely taken a non-interventionist approach to child protection within a sporting context. Nonetheless, organisations cannot ignore child safety concerns. Organisations managing the training and development of young athletes will owe a duty of care to such individuals, which is generally recognised to be a higher duty than for adults. Further, organisations need to consider their employees carefully, for whose actions they can be liable. The Safeguarding of Vulnerable Groups Act 2006 also requires that any individuals who are involved in a regulated activity (capturing both professional and voluntary sports coaching) and are subsequently removed because they may have caused, or may cause, harm to a child, are referred to the Disclosure and Barring Service (DBS). It is an offence to employ anyone who has been barred by the DBS. Many sports also operate their own child protection rules, placing stringent criteria on sports clubs and actively monitoring the implementation of child protection policies, requirements for parental permission and even a right to ban participants who are considered to be a potential risk to child safety. Many organisations also work alongside the NSPCC’s Child Protection Sport Unit (CPSU), which operates in partnership with Sport England, Sport Northern Ireland and Sport Wales. The CPSU provides guidance to sports clubs on child protection and has developed its own safeguarding standards, with the aim of providing a national benchmark for good practice in sport.Club and country representation
What employment relationship issues arise when athletes represent both club and country?
Subject to complying with general UK employment law principles, NGBs are generally free to regulate the employment frameworks within their sport, which will usually include the relationship between club and country and the inevitable conflicts that arise within this.
Off-field activities, such as promotional work, can be a particular issue. Athletes can often be required to promote brands for their national teams who are competitors of their domestic club’s or even personal partners or sponsors. Further, disciplinary matters can bring club and country into conflict, in particular, as to where jurisdiction lies for dealing with any infractions.
Beyond a sport’s basic rulebook, many NGBs will enter into a separate contractual relationship with their national players, covering their appearance fees, promotional activity and disciplinary processes. This relationship can provide the international team with additional control over the player and direct rights of action against them for any rule infractions. Certain sports may also operate a ‘central contract’ framework whereby the NGB has the primary employment relationship with the athlete. The terms and operation of such structures are often heavily negotiated between player unions and NGBs through collective bargaining arrangements. These can also be supplemented by agreements between NGBs and the domestic leagues (and their member clubs), managing issues such as conflicts in player availability for competing fixtures and applicable compensation or extra funding in consideration of a league’s agreement to such arrangement.Selection and eligibility
How are selection and eligibility disputes dealt with by national bodies?
Selection and eligibility for national teams will be determined by the rules of the national NGB for each sport (albeit that international federation rules may also supplement these). These will provide for how any disputes are to be settled and the relevant appeals body for review of any selection decisions. Most organisations will designate an independent arbitrator as a final appeals body, such as Sports Resolutions or the CAS. See 'Court enforcement' for details of where appeals may alternatively be made to the national courts.
What are the key taxation issues for foreign athletes competing in your jurisdiction to be aware of?
Foreign athletes living and working in the United Kingdom under a UK employment contract will likely become UK tax residents and be subject to UK tax on their worldwide income. UK employment income received will usually be taxed through PAYE deductions made by their employer.
Although the starting point for UK tax residents is that UK tax is due on worldwide income, certain foreign athletes may be deemed ‘UK non-domiciled’, enabling them to potentially make a claim for what is known as the remittance basis in order to avoid their non-UK income being subject to UK tax, provided that they do not remit or enjoy this foreign income in the United Kingdom and do not intend to reside in the United Kingdom long term.
For those temporarily visiting the United Kingdom the position can be more complex. While foreign athletes entering the United Kingdom sporadically as part of their overseas employment will generally not be subject to UK taxation, athletes who compete or train in the United Kingdom for a large periods of the year are at risk of becoming UK tax resident for the purposes UK taxation, resulting in potential UK taxation of their worldwide income. Athletes not permanently residing in the United Kingdom will need to consider their travel schedules to and from the United Kingdom carefully and whether this could trigger UK tax residency and potential UK tax liabilities on their non-UK sourced income.
Even where foreign athletes have not triggered UK tax residency, income can be subject to UK tax where it is considered to derive from a ‘relevant activity’ in the United Kingdom. This includes participation in sporting events as well as endorsement, sponsorship and other promotional activities carried out as part of any sporting performance. Foreign athletes can therefore find themselves subject to UK taxation on part of their general sponsorship income in addition to any match fees or prize winnings from a tournament in the United Kingdom. Athletes have previously complained that competing in the United Kingdom can cost more in tax than the competition fees earned.
When a foreign athlete is subject to tax in two jurisdictions on the same income, he or she may be able to reduce any taxes payable in one of the jurisdictions by taking a Foreign Tax Credit for overseas taxes paid under the terms of a double tax treaty. At present, the UK government claims to have the largest network of treaties, covering around 120 countries.
Update and trendsKey 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?
Uncertainties remain around Brexit, and the precise impact on the sports industry will remain unclear until further details of Brexit are confirmed. One significant concern for sports organisations will be the nature of the UK’s post-Brexit immigration requirements, which could have a significant impact on future recruitment of foreign athletes by sports organisations, in particular the Premier League.
There has been a growing focus on the use of image rights by individual athletes and the associated payments for these by sports organisations. The decision of the First-tier Tribunal (Tax) (FTT) in Hull City AFC (Tigers) Ltd v HMRC in March 2019 has been of particular interest within the industry, being the first time the FTT considered taxation of payments in connection with a footballer’s image rights since 2000. The success of HMRC in this case will no doubt embolden it to continue scrutinising such arrangements, though conversely some industry participants have suggested that the decision can be regarded as helping clubs, image rights companies and their advisers to justify their image rights arrangements in the event of a future challenge.
Gambling in sport continues to remain a hot topic, particularly for sports governing bodies that have to consider how best to manage the involvement of gambling sponsors within their existing regulatory framework, balancing the positive effects of the money gambling sponsors can bring to sport against the potential cultural impact of gambling advertising on sport. There has also been increasing pressure on the UK government to act, but it remains to be seen whether it will make any material interventions.
Finally, the use of data in sport continues to grow as sports organisations seek to use data both to improve on-field performance and to understand how best to engage with consumers and fans. One key issue in this context will be the battle for ownership and rights in data, whether by clubs, leagues or other organisations who collect and manipulate it.