The EU in International Sports Governance

A Principal-Agent Perspective on EU Control of FIFA and UEFA

A. Geeraert

• Publisher: Palgrave Macmillan
• Year: 2016
• Print ISBN: 9781137517777
• eBook ISBN: 9781137517784
• Topic: Politics & International Relations
• Subtopic: European Politics
• Index: Politics & International Relations

This book demonstrates that the European Union (EU) can curtail the autonomy of FIFA and UEFA by building upon insights from the principal-agent model. The author argues that EU institutional features complicate control, but do not render the EU powerless, and that FIFA and UEFA can deploy a variety of strategies to mitigate control.

1

Introduction

The sports sector has benefited from very favourable treatment by the EU in recent decades. We have respected its right to self-governance. But this autonomy must be earned. Sports federations that do not adhere to the highest ethical norms must be subject to enhanced control. And when necessary, be submitted to our various regulatory powers.

(Tibor Navracsics, European Commissioner for Education, Culture, Youth and Sport)¹

The governance of sport governing bodies (SGBs), private entities that hold a monopoly on regulating competitive sports at an international (i.e. global or continental) level, is increasingly being questioned. Lack of transparency, democracy, and effectiveness has resulted in failures of governance, including a series of high-profile corruption scandals. The 2002 Olympic Winter Games bid scandal involved allegations of bribery for Salt Lake City to win hosting rights (Mallon, 2000). Mexican Ruben Acosta allegedly got away with at least $33 million in personal commissions in the last decade of his 24-year reign as president of the International Volleyball Federation (Hoy, 2005). Most recently, a report issued by the World Anti-Doping Agency (WADA) found corruption and bribery practices at the highest levels of the International Association of Athletics Federations (IAAF) relating to the cover-up of doping abuses (WADA Independent Commission, 2015). Yet the litany of corruption-related indictments enveloping the Fédération Internationale de Football Association (FIFA), the world governing body of football, has unquestionably been the most visible. On 27 May 2015, US authorities indicted 14 officials on racketeering, wire fraud, and money laundering charges. Seven current FIFA officials (including one FIFA vice-president) were arrested by the Swiss authorities at the request of the US Department of Justice on suspicion of receiving $150 million in bribes in return for media and marketing rights during FIFA events in North and South America (this amount was later increased to $200 million). US and Swiss authorities subsequently initiated separate criminal investigations into the awarding of the 2018 and 2022 football World Cup hosting rights to Russia and Qatar, respectively (Gibson, 2015a). The indictments took place in the days leading up to the 65th FIFA Congress in Zürich, which would see the re-election of Joseph ‘Sepp’ Blatter, FIFA president since 1998. Blatter’s re-election took place amid growing criticism over his position, voiced in particular by Michel Platini, president of the Union of European Football Associations (UEFA), the organisation responsible for organising football competition at the European level. Four days later, on 2 June, Blatter announced his resignation.

One day later, on 3 June, European Commissioner for Education, Culture, Youth and Sport Tibor Navracsics said in an official statement: ‘We respect sports federations’ right to run themselves, but after so many missed opportunities and the complete loss of trust in FIFA, I believe we should support fundamental change and ensure that solid solutions are put in place. I am now beginning to reflect on how the European Commission, and action at EU level more broadly, can play a role in this’ (Navracsics, 2015). Ten days later, L’Équipe, a French newspaper devoted to sports, published an open contribution by Mr Navracsics in which he clarified the role of the EU in reforming FIFA and SGBs in general. The Commissioner stressed that the EU was willing to help those organisations that are open to change. As for SGBs that do not adhere to the highest ethical norms, those ‘must be subject to enhanced control. And when necessary, be submitted to our various regulatory powers’ (Navracsics in L’Équipe, 2015).

None of Mr Navracsics’ statements were widely reported in the news media, mirroring the general absence of the EU in the latest chapter of the FIFA soap opera. The Commissioner’s own wording is indicative of the reasons why. In his first comment, he admitted that he himself was still defining the appropriate role for the EU in the FIFA saga; in his second statement, he merely referred to ‘enhanced control’ as a response to bad governance in SGBs. Clearly, this control is not as straightforward and mediagenic as the policing actions taken by US authorities. That said, the EU has been widely touted in academic literature as the (public) actor most capable of influencing sport governance at an international level. EU law has had a substantial impact on sports governance (Parrish, 2003a; Weatherill, 2006). Moreover, because the entry into force of the Lisbon Treaty in 2009 gave the EU a supporting sporting competence, the EU even holds a legal basis to conduct sports policy, removing ‘any doubt that EU has a legitimate, if subordinate, role in the field of sport’ (Weatherill, 2012, p. 415). The general consensus is that the EU is an actor in its own right in international sports governance and has been able to influence the conduct of SGBs through both law and policy. This implies that it holds some kind of power over SGBs – the EU is able to compel SGBs to do something that they would not otherwise do. What is this power and how does it translate into control? And, given the multi-level governance nature of the EU, which actors define this control? Answering these questions will give a clearer view on the potential and nature of the EU’s control over SGBs.

This study applies the principal-agent (PA) model to analyse EU control of the governance of European football. The PA model is used to model representative relations between two actors when an agent conducts tasks on behalf of a principal. More specifically, this study explores and explains which actors and instruments define the Court of Justice of the European Union (CJEU) and the European Commission’s control of FIFA and UEFA, as agents. This case can be seen as a ‘crucial experiment’ wherein the crucial variables determining EU control are present (cf. Naroll, 1966, p. 336). Indeed, although degrees of control will vary, the Commission and the CJEU have the same control instruments at their disposal in relation to other SGBs, and activation and mitigation of control takes place through the same scenarios. This allows for generalisations of the EU’s broader role in international sports governance, which justify the title and general scope of this book.

It is often assumed that the governance of football constitutes a different world, one without accountability and regulation (Dupont, 1996; Pieth, 2014a; Pielke, 2013). However, a CJEU case abolished both the international transfer system for football players (previously defined by FIFA and UEFA) and a quota system restricting the number of foreign football players on a match squad. The infamous Bosman ruling, now 20 years old, unearthed the (potentially) far-reaching effects of the application of EU internal market law on both FIFA’s and UEFA’s functioning (Duval and Van Rompuy, 2016; see Chapter 4).² In addition, the EU has achieved some success in influencing FIFA and UEFA through sports policy (Geeraert, 2014a), yet both FIFA and UEFA have successfully dodged EU control to a certain degree (García, 2007; Niemann and Brand, 2008). These preliminary indications of control render FIFA and UEFA, two of the most powerful SGBs – one operating at the global and the other at the continental level – particularly suitable for analysing EU control of SGBs.³

Exploring and explaining the actors and instruments that define EU control of SGBs, this book makes an original contribution to three strands of EU studies literature, namely the literatures on the EU and sport, PA analysis, and EU external action. First, it contributes to the emerging (though still largely under-theorised) literature on the EU as an actor in international sports governance. Only recently have political scientists turned attention to sport. The lack of theoretical underpinning is thus a characteristic of the literature on politics and sport more generally (Grix and Houlihan, 2014). This book provides a more complete picture of the empirical reality of EU control, which remains unclear (Geeraert and Drieskens, 2015b). The PA perspective on control presented in this book helps integrate the literature on lobbying (García, 2007; García and Meier, 2012; García and Weatherill, 2012), EU sports regulation (Parrish, 2003a; Weatherill, 2006), networked governance (Henry and Lee, 2004; Holt, 2006; García, 2008), and more recent contributions on policy interventions in sport (Geeraert, 2014a) into a single (PA) framework. Relying on its rational choice assumptions about principal and agent behaviour, this book uses the PA model to construct a general framework from which hypotheses on EU control of FIFA and UEFA are derived and tested. The empirical testing of the PA model reveals that actors involved in EU control of FIFA and UEFA act in a rational manner, seeking to maximise the attainment of their relatively fixed preferences. As such, the model succeeds in correctly isolating the most essential features of EU control and therefore leads to general predictions that can be translated into concrete policy advice.

Beyond FIFA and UEFA, this book demonstrates that the EU has a large toolbox of instruments at its disposal for controlling SGBs. These instruments, their activation, and their mitigation constitute the three independent variables that determine EU control of SGBs. In other words, control is determined by a dynamic interplay between actors and instruments. A better understanding of these processes sheds light on the actual role and the potential role the EU will play in international sports governance in the coming years. Simply put, it reveals the EU’s potential to remedy bad governance.

Second, contributing to the literature on PA analysis, this book introduces an exogenous perspective (exogenous control and mitigation) to the endogenously oriented PA literature. It also adds a new control instrument: steering. In addition, it provides insights into the application of the PA model to complex networked settings. Traditional applications of the PA toolbox analyse control in a dyadic setting between a (set of) principal(s) and its (their) agent(s). This endogenous model is extended to include control that goes beyond mechanisms intrinsic to dyadic PA relationships (Geeraert and Drieskens, 2015a).

Here, a triangular rather than a dyadic PA model is employed. This perspective shows that, whereas football stakeholders and public authorities as principals lack control options over FIFA and UEFA (here, the agents), they may rely on the CJEU and the Commission (supervisors) to exercise control on their behalf. Yet, within this triangular set-up, FIFA and UEFA can mitigate control by influencing the preferences of both their principals and the Commission. Activation and mitigation of control within the triangular PA model dictates whether or not FIFA and UEFA can expect their autonomy to be curtailed by the EU. In order to fully comprehend the EU’s control of FIFA and UEFA, the notion of steering is introduced to the PA literature as a distinct ex post control mechanism. This innovation is achieved by bringing the PA literature into conversation with the more traditional governance literature (Geeraert, 2016a). Sharing a rational-choice orientation, both bodies of literature point to the importance of a credible threat of coercion in order to achieve compliance (Scharpf, 1994; Héritier and Rhodes, 2011). In contrast, the governance literature puts a different emphasis on the available modes of changing actors’ behaviour.⁴

Finally, within the broader EU governance context (by focusing on the under-theorised issue of EU influence on SGBs), this book fills a void in the literature on EU external action. Authoritative edited vol-umes on the EU’s relationship with international institutions do not include contributions on the EU’s relationship with SGBs (Jørgensen and Laatikainen, 2013; Oberthür, Jørgensen and Shahin, 2013). Moreover, PA scholars almost exclusively adopt an inter-institutional perspective on EU external actors, building on Pollack’s (1997) seminal work on how member states control EU institutions. Thus far, the model has not been applied to examine the EU’s control over external private actors. Moving beyond existing applications of the PA model to European governance, this book shifts focus to the relationship(s) between EU institutions and private external actors, scrutinising the EU’s capacity to control private organisations like FIFA and UEFA.

In this light, the case of FIFA and UEFA challenges existing views of EU governance of private actors. Scholars who focus on these actors suggest the EU’s influence is confined to those policy areas where it has options for deploying a hierarchical intervention. Even if the EU does not actually use this capacity, private actors may change their behaviour because they seek to avoid legislation (Best, 2008; Börzel, 2010; Héritier and Rhodes, 2011). The empirical and theoretical arguments in this book nuance the emphasis on strong formal competence, highlighting the importance of the ability to impose costs in determining EU control of private actors. This possibility may emanate from a strong formal competence in a particular policy field, but it can also be the consequence of the EU’s powers in another domain, notably the internal market (Damro, 2012). This study demonstrates how the lack of a strong formal sporting competence does not belie the EU’s control of SGBs; SGBs are willing to comply with sports policy out of a fear of accruing costs as the EU applies its laws to sport rules.

1.1 Setting the scene

The relationship of the EU with SGBs and thus its role in international sports governance cannot be fully understood without taking the historical context of sports governance into account. This section presents a brief historical note in order to frame the marked tension between autonomy and control in which this relationship is embedded. This tension defines actors’ behaviour and interests. FIFA and UEFA, the agents in this study, are briefly introduced. We also take a quick look at the state of the art of the literature on the EU and sport.

1.1.1 The governance of international sport: Origins and challenges

At the turn of the 20th century, international competition spurred the need to centralise the organisation of sport and to unify rules, paving the way for the first SGBs. The creation and success of the modern Olympic Games, for instance, increased international competition (Chappelet and Kübler-Mabbott, 2008, p. 64). The international sports governance system that soon crystallised can generally be described as a hierarchical network running from the global to continental, national, and local levels, in which, for a single sport, an international sport federation stands at the apex of a vertical chain of command. The International Olympic Committee (IOC) quickly established itself as a pivotal actor in international sports governance. The IOC derives its status from its authority over the Olympic Movement, a complex regime created to regulate the Olympic Games, which remains the most important multi-sport event to this day. Currently, the sports regulated by 35 unique international federations are on the programme of the Summer or Winter Olympic Games, and these federations receive a part of the broadcasting and marketing revenue generated by the Games. Given both its financial and regulating power and its international status, the IOC wields a lot of power in international sports governance (Chappelet and Kübler-Mabbott, 2008).⁵ However, it must be noted that large federations often hold de facto veto power. Regarding FIFA, the IOC’s powers are limited because FIFA’s own football World Cup far outshines the Olympic football tournament.⁶

SGBs were able to consolidate their monopolies as global regulating bodies for their respective sports because they fulfilled the need for consistent rules. Moreover, the public sector has long regarded sport as a cultural and, above all, amateur activity; the commercialisation of sport only seriously took off in the past few decades.⁷ As a result, international sports governance has remained largely private in nature. The sports world claims that the regulation of sport is best kept private. This was most eloquently formulated by Pierre de Coubertin, founder of the modern Olympic Games. He stressed that ‘the goodwill of all the members of any autonomous sport grouping begins to disintegrate as soon as the huge, blurred face of that dangerous creature known as the state makes an appearance’ (de Coubertin, cited in Chappelet, 2010, p. 14). This seems rather a dramatisation of the issue. However, state instrumentalisation of sport for geopolitical aims has indeed harmed the integrity of sport on several occasions – witness the exploitation of sport by the Soviet Union, which led to state-sponsored doping abuse (Voy and Deeter, 1991), and institutionalised practices of doping revealed by the already mentioned WADA report (WADA Independent Commission, 2015). At the same time, SGBs are certainly not apolitical.

Politics has co-opted sport ever since the start of the Olympics in Ancient Greece (Jackson and Haigh, 2009). In recent years, this symbiosis has become particularly visible in the politics and policies of the so-called emerging countries, which tend to see sport mega-events as ‘proxies for integration and influence’ (Cornelissen, 2010, p. 3015). Academics have wrapped this agenda in terms of soft power. Nye (2008) introduced this notion in the world of sport in relation to the 2008 Beijing Olympics when explaining how China hoped to increase its external appeal by successfully hosting these games. Ever since, this notion has been extensively used to indicate that countries focus on (the organisation of) sports mega-events to increase their external attractiveness (Brannagan and Giulianotti, 2014). Various countries have tried (and succeeded) to increase their influence on international sports governance with the aim of organising large sporting events and consequentially, augmenting their ‘soft power’ (Cornelissen, 2010; Brannagan and Guilianotti, 2014; Nye, 2008; Weinreich, 2014; Persson and Petersson, 2014). Russian president Vladimir Putin has certainly been the most active and successful in this r...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Tables, Figures, and Boxes
• Acknowledgements
• Abbreviations
• 1. Introduction
• 2. The EU’s Engagement with FIFA and UEFA: Principals, Agents, and Supervisors
• 3. Representation and Control in the Governance of European Football
• 4. The EU Law Route
• 5. The EU Sports Policy Route
• 6. The Limits of EU Control
• 7. Conclusion
• Notes
• References
• Index