Category: SportsLaw

“Prometey” Leaves Riga Under a Cloud: BAT Orders Club to Pay Over $200k in Unpaid Salary and Fees

The Riga chapter for Ukrainian basketball club “Sports club Prometey” has ended in a significant financial scandal. While the club used Riga, Latvia, as its home base for the 2023-2024 season , its final season is now marred by a Basketball Arbitral Tribunal (BAT) ruling ordering it to pay substantial outstanding sums to a former player and his agency.

As we know, the club has announced that it ceases its operations.

The Heart of the Dispute

The case (BAT 2199/24) was brought by Lithuanian player Mr. Arnoldas Kulboka and his agency, Wasserman France , against “Prometey”.

The dispute centered on an agreement signed on July 20, 2023, for the 2023-2024 season. The problems began after Kulboka suffered a season-ending injury around September 2023. Although the parties signed an “Amendment Agreement” on October 23, 2023, to restructure the payment schedule , the club ceased all payments from March 2024 onwards.

This left significant amounts unpaid, including the player’s salary, the agent’s commission, and, critically, the player’s medical and rehabilitation expenses. After sending a late payment notice , the claimants terminated the contract on April 18, 2024, due to the breach.

The Club’s Defense and the Arbitrator’s Rebuttal

In response to the payment demands, “Prometey” claimed in an April 15, 2024, letter that it was “impossible for Ukrainian companies to make any transfers of funds abroad”.

The Arbitrator flatly rejected this defense. The ruling noted that:

• The club’s own contract explicitly stated it would “make all arrangements necessary within the Latvian banking system” for the player to transfer his funds.
• The club had successfully made all payments before March 2024, proving it was possible.

Tellingly, “Sports club Prometey” failed to submit an Answer to the Request for Arbitration or participate in the proceedings, effectively defaulting.

The Final Bill: What “Prometey” Owes

The Arbitrator ruled decisively in favor of the claimants. “Prometey” has been ordered to pay the following:

• To Arnoldas Kulboka:
  • $194,442.00 (net) for unpaid salary.
  • €1,120.00 for reimbursement of medical expenses.
  • Interest at 5% per annum on the outstanding amounts.
• To Wasserman France:
  • $17,500.00 (net) for unpaid commission.
  • Interest at 5% per annum from March 31, 2024.
• Arbitration & Legal Costs:
  • The club must also pay the claimants €8,000.00 for arbitration costs and €12,500.00 as a contribution toward their legal fees.

In total, the ruling compels “Prometey” to pay over $211,000 and €21,600, plus ongoing interest—a sour financial end to the club’s time in the Latvian capital.

The claimed fee for legal services was around EUR 17.500.

In Latvia the services of the sports lawyer would cost significantly less for a case of similar volume and complexity.

• Dance clubs against children rights: unfair payments required ti change dance club.

• The system created by dance clubs goes against motivating clubs to improve.

In a significant move for the sports sector, Latvia’s Competition Council (Konkurences padome, or KP) has successfully addressed anti-competitive practices within the Latvian Sports Dance Federation (LSDF). Following an in-depth investigation, the KP determined that the federation’s rules on children switching sports dance clubs were disproportionate and hindered fair competition in the sports dance services market. In response to the KP’s recommendations, the LSDF has implemented substantial reforms, effectively eliminating the identified risks.

The Investigation’s Origins and Findings

The probe began after a private individual complained about challenges faced by their children in changing sports dance clubs. At the heart of the issue was the LSDF’s Club Change Procedure, outlined in Section 7 of the federation’s Competition Regulations. This procedure allowed for transition periods and potential compensation payments when children switched clubs.

Through its research, the KP gathered additional information from the LSDF and compared the rules to practices in other European countries. While such regulations are common in professional sports to ensure sector stability, the KP found they could unduly restrict dancers’ freedom of movement—particularly for children—and reduce competition among clubs. This, in turn, diminishes clubs’ incentives to compete on quality and attract new clients, ultimately harming the overall development of sports dance.

A key concern was the lack of justification for applying these rules to children in the same way as professional dancers. Children’s sports dance is a voluntary leisure activity focused on personal growth, not commercial pursuits. The KP was especially critical of compensation requirements, as there was no evidence that clubs made significant, reimbursable investments in improving children’s skills.

The KP highlighted how such rules could unfairly limit competition by imposing excessive financial or administrative barriers, lacking clear objectives, or favoring certain clubs over others. This creates risks of competition law violations, potentially disadvantaging athletes and clubs alike.

Reforms and Their Impact

In light of the KP’s call for a review, the LSDF made key amendments to balance stability with dancers’ rights:

• Elimination of Compensation Payments: Clubs can no longer demand financial reimbursements for switches.
• Shortened Transition Period: Reduced from four months to three months.
• Exceptions and Age Limits: Switches during the summer period are exempt from restrictions, and the rules now apply only to dancers aged 10 and older.

These changes are expected to foster a more competitive environment, allowing sports dance clubs to vie more freely for young talent and enhancing service quality for participants.

Broader Implications for the Sports Industry

Beyond this specific case, the KP used the opportunity to educate the wider sports sector on competition law. Sports organizations, including federations and their members, can be considered market participants subject to Latvia’s Competition Law. The council pointed out other common risks, such as:

• “No-Poach” Agreements: Deals between clubs or federations prohibiting the recruitment of athletes, which limit mobility and competition for talent. (For more on employee poaching and competition law, see here).
• Restrictive Licensing and Qualification Rules: Barriers in event licensing, athlete qualifications (e.g., bans on certain competitions), or organization that block market access.
• Abuse of Dominant Position: By federations or associations, such as excluding rival events or clubs.

As acting KP Chair Ieva Šmite noted:

“This case highlights a broader and increasingly important issue—the application of competition law in the sports sector. Given that sports, especially at the professional level, are becoming more commercialized, and with heightened attention at the EU level, the KP not only resolved the identified risks in this situation but also proactively engaged the entire sports industry, explaining how competition law norms may apply to its operations.”

A Call to Action

The KP encourages sports industry stakeholders to report any observed restrictions or barriers to fair competition. Anybody suspecting anti-competitive practices, contact the KP in their website.

This development underscores the growing intersection of competition law and sports in Europe, ensuring that young athletes can pursue their passions without undue hurdles. At LegalSport.eu, we continue to monitor such cases to keep you informed on legal trends shaping the sports world.

Source: Konkurences padome press release, available here.

Basketball club “Rigas Zeļļi” did not go to the European Cups after 2nd place in its first year of existence, but does so after a lower achievement or 3rd place a year later in 2025 – in this article about some legal aspects, why is it so illogical that in the context of the FIBA EuroCup, a lower place in the tournament gave a better chance than the previously obtained higher place?

Entry into the Latvian League

First of all, the structure of the organized basketball system should be assessed. How easy or difficult is it for a team “from outside” to get participation in the tournament?

The threshold for participation in the most prestigious Latvian basketball tournament is more organizational and financial than sporting – if in amateur competition one has to fight for the right to participate, then at the “professional” (semi-professional) level in Latvia there are an average of 6 to 8 teams, where every addition to the team list is worth super-high. For comparison, in football, you have to show sporting results in order to be able to make it to the Premier / supreme / higer league (the existence of a FIFA/UEFA requirement), but in the LBL there is no such criterion (the absence of a FIBA requirement, partly).

This difference arises from the relatively low level of competition between clubs for places in the Latvian basketball elite, including the average in Europe as a whole.

Rīgas Zeļļi have never played in the LBL 2nd league, but immediately started at the highest level – having managed to convince the LBS (LBL) management that the project is at the level of a professional team.

FIBA requirements

Although FIBA does not require national basketball federations to create a hierarchical system in national tournaments, a certain order exists in European cups. A newly established club cannot, based only on good organizational criteria, bypass the sporting system.

FIBA tournament regulations regularly contain strict requirements for the fulfillment of sporting criteria, and only then can one assess how well the club’s organization is structured.

FIBA has the following rule in place:

Any European National Federation which is a member of FIBA is entitled, in accordance with the provisions set out below and according to the regulations valid for the respective national competitions, to enter a certain number of its clubs in the FIBA Europe Club Competitions

This year, the FIBA regulations contain the following text:

RIGHT TO PARTICIPATE IN THE 2025-2026 SEASON

5. ATIONAL FEDERATIONS

Any European National Federation which is a member of FIBA is entitled, in accordance with the provisions set out below and according to the regulations valid for the respective national competitions, to enter a maximum of two (2) clubs in the FIBA Europe Cup 2025-2026. The National Federation of the FEC Champion of the previous season shall be entitled to register up to three (3) clubs for the FIBA Europe Cup 2025-2026, if the FEC Champion is back in the competition and the two (2) other clubs are eligible based on the domestic ranking (see article 5.2). The number of clubs participating in the Regular Season shall be either thirty-two (32) or forty (40) depending on the number of registrations. Up to twenty (20) of the clubs participating in the Regular Season will be the losers of the Qualification Rounds of the Basketball Champions League. 5.2 6. 7. 7.1 The selection of the clubs will be based on sporting results of clubs in their national leagues. Only clubs that did not finish in the bottom 3rd of their top national league standings in the previous season can be registered by the National Federations for the FIBA Europe Cup. If necessary, one (1) or two (2) Qualification Round(s) or Qualification Tournaments will be played to determine the thirtytwo (32) or forty (40) clubs that will play in the Regular Season. Should the club(s) of the National Federation(s) not use its (their) right to the place(s) in the competition, then FIBA Europe shall decide on the allocation of such place(s).

6. CLUBS

Any club which is registered through the National Federation is entitled to participate in the competition provided that the following requirements are guaranteed:

“Registered with” vs. “member”

In the Latvian law, to be “registered with” usually means being a member of that federation – which operates as association and has historically managed this through “member’s” status.

Therefore, just to be safe that the team will not suddenly move its legal operatinos to any other jurisdiction, the registrations usually would fall under this interpretation.

Rīgas Zeļļi member status in LBS

As can be seen from FIBA documents, LBS has the right to nominate only existing [members] for participation in European Cups.

In the 2023/2024 season, Rīgas Zeļļi won 2nd place in the LBL, even without being a member of LBS.

As is known, the silver medalists applied for this status only on 17.07.2024 (“LBS Board decision of 18.07.2024 (minutes 13, article 9) – LBS member decision (exception to article 3.7 of the LBS Statutes).”)

As indicated in the public minutes of LBS:

K.Cipruss informs that LBS has received the application of the association “Rīgas Zeļļi” dated July 17, 2024 for granting member status and informs about the association’s achievements in basketball development to date.

Now, Rīgas Zeļļi is an LBS member, therefore, the success of the 2024/2025 season allows the club to receive FIBA approval in 2025/2026 on the basis of sporting principles.

FIBA onboards Rigas Zelli

FIBA release on team status here: https://www.fiba.basketball/en/events/fiba-europe-cup-25-26/news/clubs-announced-for-fiba-europe-cup-2025-26-season

Welcome back to the final part, readers!

In the final part of our mini-series, we explore Advocate General Nicholas Emiliou’s opinions on the third case, Case C-133/24 (Tondela and others), which involves a no-poach agreement among football clubs in Portugal‘s first and second divisions during the COVID-19 pandemic. This case examines the compatibility of such agreements with EU competition law, specifically Article 101 TFEU.

Introduction

The dispute in this case arises from a no-poach agreement concluded by football clubs in the Portuguese football league’s first and second divisions, in agreement with the national football association, during the COVID-19 pandemic. The agreement aimed to prevent clubs from signing players who had unilaterally terminated their contracts due to the pandemic or any exceptional decisions arising from it.

Legal Framework and Background

The Liga Portuguesa de Futebol Profissional (LPFP) is a private-law not-for-profit association that supports and regulates professional football activities in Portugal. During the 2019/2020 season, the LPFP, in response to the COVID-19 pandemic, decided to suspend the First and Second Divisions indefinitely. Subsequently, the LPFP and the Union of Professional Football Players (SJPF) set up a COVID-19 Monitoring Committee to negotiate measures ensuring the sustainability of the sport.

On April 7, 2020, the LPFP and the clubs participating in the First Division agreed that no club would hire a player who unilaterally terminated their employment contract due to the pandemic. This agreement was later adopted by some Second Division clubs.

Questions Referred for Preliminary Ruling

The Tribunal da Concorrência, Regulação e Supervisão (Competition, Regulation and Supervision Court, Portugal) referred three questions to the Court of Justice for a preliminary ruling:

1. Does an agreement such as the no-poach agreement constitute a rule of sporting interest for the purposes of the Meca-Medina case-law?
2. Can such an agreement be regarded as proportionate and appropriate, and therefore compatible with Article 101(1) TFEU?
3. Does Article 101(1) TFEU preclude an interpretation that an agreement with the characteristics described may be classified as a restriction of competition by object?

Advocate General Emiliou’s Analysis

Scope of the Meca-Medina Case-law: Advocate General Emiliou explains that the Meca-Medina case-law applies to agreements that restrict the freedom of action of undertakings if they are justified by the pursuit of legitimate objectives in the public interest, are genuinely necessary for that purpose, and do not eliminate all competition.

No-Poach Agreements and Restrictions by Object: Emiliou argues that no-poach agreements, which prevent clubs from hiring players who terminated their contracts, can be inherently anticompetitive. However, the specific circumstances of the COVID-19 pandemic and the limited scope of the agreement may exclude its inherently anticompetitive nature.

Proportionality and Appropriateness: The Advocate General suggests that the agreement in question was motivated by the genuine desire to ensure a fair and orderly end to the season, preserving the integrity and fairness of the competition. The agreement had a limited scope, applying only to certain players for a short period, and did not eliminate all competition.

Conclusion

Advocate General Emiliou proposes that the Court answer the questions referred for a preliminary ruling to the effect that:

1. A no-poach agreement concluded during the COVID-19 pandemic by professional sports clubs, in agreement with their national sports association, shall not be classified as restrictive by object if its genuine rationale was to preserve the fairness and integrity of the sports competition.
2. Such an agreement falls within the scope of the Meca-Medina case-law provided that it genuinely sought to ensure the integrity and fairness of the sports competition and was necessary and proportionate to that objective.

Final Thoughts

This concludes our three-part series on Advocate General Emiliou’s opinions on sports governing bodies’ regulations. We hope you found these insights valuable and informative. Stay connected with us for more updates and detailed analyses on legal developments in the world of sports.

Thank you for reading, and we look forward to sharing more insights with you soon.

Welcome back, readers!

In the first part of our series, we introduced Advocate General Nicholas Emiliou’s opinions on three significant cases involving sports governing bodies and their regulations.

Today, we continue with an in-depth look at the second case, Case C-428/23 (ROGON and others), which involves the Deutscher Fußballbund e. V. (DFB) and its regulations governing the activities of players’ agents.

Historically, sports has been “exceptional” playground. Though, agents are a pure business, even though they work in the exceptionla field of sports, without necessarily being athletes.

Introduction

The dispute in this case arises from requests for cease and desist lodged by three applicants:

• two undertakings providing consultancy and representation services to football players, and
• the managing director of one of those firms.
• They challenge certain rules set out in the DFB’s regulations, arguing that these rules infringe EU competition law.

Legal Framework and Background

The DFB is the umbrella organization of 27 German football associations, with approximately 25,000 clubs and more than 7 million members. It is also a member of FIFA and is subject to its regulations. The DFB adopted the Reglement für die Spielervermittlung (RfSV), which governs the activities of players’ agents and entered into force on April 1, 2015.

The RfSV imposes several obligations on agents, including:

• Registration requirements for agents and natural persons when registering a legal person.
• The production of an agent’s declaration, subjecting agents to various statutes, regulations, and rules of FIFA, the DFB, and the DFL.
• Prohibitions on agents sharing in the club’s future transfer proceeds and receiving commissions for services in respect of minors.
• Obligations to disclose fees paid and payments made to agents.

Breaches of these regulations can be sanctioned as unsportsmanlike conduct.

Questions Referred for Preliminary Ruling

The Bundesgerichtshof (Federal Court of Justice, Germany) referred two questions to the Court of Justice for a preliminary ruling:

1. Do the principles developed in the Meca-Medina case-law apply to the regulations of a sports association that regulate the use of services of undertakings outside the association on a market upstream of the association’s activities?
2. If so, must the Meca-Medina test be applied to all provisions of those regulations, or does its application depend on substantive criteria, such as the proximity of the individual rule to the sporting activity of the association?

Advocate General Emiliou’s Analysis

Scope of the Meca-Medina Case-law: Advocate General Emiliou explains that the Meca-Medina case-law applies to regulations of a sports association that concern the use of services of undertakings active in markets upstream or downstream of the association’s activities, provided that those services are capable of having a direct and significant influence on the association’s core activities.

He emphasizes that the rationale of the Meca-Medina case-law is to enable public authorities to leave certain matters to self-regulation by entities pursuing the economic activities concerned. However, this mandate must be limited to activities carried out by the undertakings represented in the association.

Application of the Meca-Medina Test: The Advocate General suggests that each rule included in a regulation issued by a professional body or sports association ought to be examined separately. However, there may be situations where it would be artificial to split a set of rules into its various components, as they constitute an indivisible whole.

He also notes that the degree of proximity between the activity of the association and the activity of the undertakings affected by the association’s rules is relevant in assessing whether the rules are necessary and proportionate in light of the legitimate objective in the public interest pursued.

Conclusion

Advocate General Emiliou proposes that the Court answer the questions referred for a preliminary ruling by the Bundesgerichtshof to the effect that:

1. The Meca-Medina case-law applies to the regulations of a sports association that concern the use of services of undertakings active in markets upstream or downstream of the association’s activities, provided that those services are capable of having a direct and significant influence on the association’s core activities.
2. The conditions laid down in the Meca-Medina case-law must, in principle, be applied in respect of each rule contained in regulations issued by a professional or sports association unless a meaningful assessment requires some or all of those rules to be evaluated in combination.

Stay tuned for the final part of our series, where we will explore the third case and provide a comprehensive conclusion on Advocate General Emiliou’s opinions.

Pro sports does not seem to be only a healthy movement, right? People do make business and iving out of it!

Today, we begin a three-part series exploring the recent opinions delivered by Advocate General Nicholas Emiliou on three pivotal cases involving sports governing bodies and their regulations. These cases, presented before the Court of Justice of the European Union (CURIA), delve into the autonomy of sports associations and their compliance with EU competition, internal market, and data protection rules.

Would you agree that sports organisations enjoy full discretion in their realm?

Introduction

In recent years, the Court has reviewed the compatibility of certain regulations adopted by international or national sports associations with EU competition and internal market provisions.

The present case, involving the Fédération internationale de football association (FIFA), is a natural follow-up to those cases.

The dispute concerns FIFA’s regulations governing the activities of players’ agents and raises various interpretative issues arising from EU provisions on competition, internal market, and data protection.

Legal Framework

The legal framework for this case includes Article 6 of the General Data Protection Regulation (GDPR), which outlines the lawfulness of processing personal data. Specifically, processing is lawful if it is necessary for the purposes of the legitimate interests pursued by the controller or a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject.

Facts, Procedure, and the Question Referred

The applicants in the main proceedings are:

• FT, an agent for players and the Vice-President of the players’ agents’ association ‘Football Forum’, and
• RRC Sports, a company based in Germany that also acts as a players’ agent.
• The defendant, FIFA, is a non-profit association governed by Swiss law and the global governing body for football. FIFA’s regulations, known as the FIFA Football Agent Regulations (FFAR), provide the framework governing the remuneration, activities, and conduct of players’ agents.

The applicants brought an action for an injunction before the Landgericht Mainz (Regional Court, Mainz, Germany) seeking to bar the application of certain rules of the FFAR on the grounds that they infringe:

• Article 56 TFEU – freedom of services,
• Articles 101 and 102 TFEU – competition rules, and
• Article 6 of the GDPR – processing of personal data.
• FIFA maintains that the rules are necessary for the integrity of football. I.e., football would collapse without them.

Preliminary Remarks

Advocate General Emiliou makes several preliminary remarks to set the scene for his opinion:

1. Systemic Remarks:
   • The practice of sport, in so far as it constitutes an economic activity, is subject to EU law provisions applicable to such activity. Rules adopted by sporting associations governing paid work or the performance of services by professional or semi-professional players may come within the scope of EU provisions on free movement and competition.
   • The ‘sporting exception’ should be interpreted narrowly. Rules adopted solely on non-economic grounds and relating solely to sport per se must be regarded as extraneous to any economic activity.
2. Methodological Remarks:
   • The referring court asks the Court to provide guidance on the interpretation of four distinct provisions of EU law concerning a detailed set of regulations adopted by a world sports association.
   • The Advocate General emphasizes the need for a specific assessment of the rules in question in light of their content, legal and economic context, and objectives.

Analysis

The Advocate General’s analysis focuses on the compatibility of the FFAR with EU law, particularly Articles 101 and 102 TFEU, Article 56 TFEU, and Article 6 of the GDPR. The analysis involves examining whether the rules in question have an anticompetitive object or effect, whether they can be justified under the Meca-Medina case-law, and whether they may benefit from an exemption under Article 101(3) TFEU.

In the next part of this series, we will delve deeper into the Advocate General’s analysis of the rules on agents’ remuneration and licensing, and their compatibility with EU competition law.

Stay tuned for more insights and detailed analysis in Part 2 of our series on Advocate General Emiliou’s opinions on sports governing bodies’ regulations.

Greetings, readers!

Today, we are excited to share a brief overview of Advocate General Nicholas Emiliou’s recent opinions on three significant cases involving sports governing bodies and their regulations. These cases, presented before the Court of Justice of the European Union (CURIA), delve into the autonomy of sports associations and their compliance with EU competition, internal market, and data protection rules.

Federations consider themselves “supreme power”, above the law – according to AG, there should be change in attitude.

Case Summaries:

1. Case C-209/23 (RRC Sports):
   • Two football agents challenge certain rules in an international sports association’s regulatory framework, arguing that these rules violate the freedom to provide services, EU competition rules, and data protection provisions. FIFA defends the rules as lawful and necessary for the integrity of football
     
2. Case C-428/23 (ROGON and others):
   • Two consultancy and representation service providers for football players, along with the managing director of one firm, seek to prevent a national sports association’s regulations from causing irreparable harm
     
3. Case C-133/24 (Tondela and others):
   • Football clubs in Portugal’s first and second divisions agreed with the national football association to abstain from signing players who had unilaterally terminated their contracts due to COVID-19-related issues
     

Advocate General Emiliou’s Opinions:

Advocate General Emiliou’s opinions address the extent to which sports governing bodies’ regulations must comply with EU laws. He proposes a narrow interpretation of the ‘sporting exception,’ suggesting that regulations adopted solely on non-economic grounds and related solely to sport fall outside the scope of EU competition and internal market rules.

Emiliou argues that while sports associations can adopt regulations related to activities of operators in upstream or downstream markets, these regulations must be justified if they have significant anticompetitive effects. Justification is possible if the regulations pursue legitimate sporting objectives and satisfy proportionality and effectiveness tests (the ‘Meca-Medina case-law’).

Additionally, Emiliou reviews the regulations against free movement rules and examines the distinction between restrictions of competition by object and by effect. He concludes that ‘no-poach’ agreements, generally restrictive ‘by object,’ may be justified given their specific objective, limited scope, and the exceptional circumstances of the COVID-19 pandemic .

Stay Tuned for More!

In the coming days, we will provide a detailed analysis of each case, exploring the legal intricacies and implications of Advocate General Emiliou’s opinions. We will delve deeper into the arguments presented, the potential impact on sports governance, and the broader implications for EU law.

Stay connected with us for these in-depth analyses and more updates on this evolving legal landscape. If you have any questions or specific areas you would like us to cover, please feel free to reach out!

Thank you for reading, and we look forward to sharing more insights with you soon.