ULEB files complaint before European commission against Euroleague organizer
ULEB, the association of the 11 major basketball leagues in Europe, has filed a competition complaint against Euroleague Commercial Assets (ECA), the organizer of EuroLeague which is the most prestigious basketball club competition in Europe.
Tomas Van Den Spiegel, ULEB President, stated:
Together with the member leagues, we are working hard to protect the sporting principles of the game, both domestically and in international club competitions and we will continue to do so. We believe that all of our clubs must be able to compete at the highest level and we want to keep the dream of international basketball alive for every club at every level. ECA decisions have had a major impact on the calendar over the past years. Once it became clear that ECA still intends to proceed with the removal of any slots for national leagues as from next season we all felt the need to undertake action to defend our rights. That is why ULEB has officially launched a complaint to the European Commission versus ECA for its anti-competitive behavior. We are convinced this is an important step towards safeguarding the European sporting model in basketball and we are looking forward to explaining to the European Commission how ECA is harming European basketball at both a domestic and international level.
The ULEB complaint
In its complaint, ULEB has uncovered evidence that shows that ECA and the 11 major basketball clubs which are its shareholders have conspired to block other basketball clubs from participating in EuroLeague.
First, EuroLeague granted long-term licenses (10 years) to each of the 11 shareholder clubs without any transparent award process.
Second, EuroLeague reduced the number of slots available from 24 slots to just 18 slots meaning that the majority of slots went to the 11 shareholder clubs of ECA.
Third, EuroLeague and the 11 shareholder clubs took control over the entry system. For some time ULEB has been concerned with how the remaining slots were granted. Last year, Euroleague removed any pretense that slots would be awarded on sporting merit. It announced that other clubs from national leagues would no longer be able to compete in Euroleague on the basis of sporting merit. Instead, the slots are to be granted at the discretion of the EuroLeague.
It’s all about the money
The reason why the organizers or EuroLeague have embarked upon this exclusion strategy has now become clear: to keep 90% of the media rights revenue generated by the EuroLeague for the 11 shareholder clubs.
The privileged access to EuroLeague is also giving the 11 shareholder basketball clubs an unfair competitive advantage when playing in national leagues. They are able to recruit the best players, obtain the highest sponsorship deals, and attract the most fans to their matches. Meanwhile, national leagues that have no access to EuroLeague are struggling and rival clubs in the national leagues with EuroLeague clubs are at a competitive disadvantage. This is putting a severe strain on the basketball eco-system in Europe which is based on the European model of sport where clubs participate in both national leagues and European club competitions.
Cartel
To ensure that no rival could develop to challenge the position of the EuroLeague once ECA and the 11 shareholder clubs took control over its entry system, EuroLeague also engaged in additional anti-competitive conduct. In particular, ECA tied participation in its secondary competition, EuroCup, to a slot in EuroLeague. ECA has also taken control over the calendar, with no regard as to the impact upon other national or European club competitions.
In view of the COVID19 crisis, ULEB had hoped that EuroLeague would re-think its unfair approach and act in a spirit of solidarity with the European basketball community. Regrettably, this did not happen. ULEB has therefore decided to bring this competition complaint.
In competition law terms, what ULEB has uncovered is a cartel involving market exclusion and market sharing. These are amongst the most serious infringements of EU competition law. That is why ULEB has asked the European Commission to come to its assistance and to investigate the conduct of ECA.
In bringing this complaint, the intention of ULEB is not to destroy EuroLeague. ULEB wants to see an exciting competition with the best teams in Europe. However, sporting merit must form the basis for access when the clubs are still competing in national leagues. This is why ULEB is asking the European Commission to not only end this cartel but also to remedy the infringement by ensuring that access to EuroLeague is based on fair, transparent, and non-discriminatory criteria.