August 22, 2017

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Red Bull Leipzig v Red Bull Salzburg: a Champions League Reality?

The summer can prove a fallow time for football fans.  With the exception of the FIFA Confederations Cup, which commences on 17 June 2017, fans have little to keep themselves entertained on the football front this summer.  Many will delve deep into the gossip pages of their favourite websites. Which players will be bought? Which players will be sold?  What will the clubs’ new kits look like?  Which players are not behaving on their summer holidays?

Other fans will simply count the days until the opening matches of the coming season.  That will particularly be the case for fans whose clubs performed well in the previous season.  The thought of competing for European trophies, as well as for the domestic league and cups, will be exciting for many supporters, especially for those whose clubs do not normally have the privilege of playing in European competitions.

So spare a thought for the fans of RB Leipzig and FC Red Bull Salzburg, who will be in purgatory this summer.

In 2013, RB Leipzig were in the fourth tier of German football.  However, following the injection of finance from Red Bull GmbH (the club’s owner), the club began a meteoric rise throughout the German league structure, finishing the 2016/2017 Bundesliga season in second place, thereby qualifying for the 2017/2018 UEFA Champions League.

However, Red Bull Salzburg, an Austrian side also owned by Red Bull, have qualified for the 2017/2018 UEFA Champions League as well, following their first place finish in the Austrian Bundesliga.

Given that both clubs are owned in some respect by Red Bull, there are questions as to whether both clubs will be permitted to participate in the UEFA Champions League given UEFA’s rules against common ownership.  Article 5 of the Regulations of the UEFA Champions League 2015 – 2018 Cycle state that:

“To ensure the integrity of the UEFA club competitions, the following criteria apply:

  1. no club participating in a UEFA club competition may, either directly or indirectly:

  2. hold or deal in the securities or shares of any other club participating in a UEFA club competition,

  3. be a member of any other club participating in a UEFA club competition,

iii. be involved in any capacity whatsoever in the management, administration and/or sporting performance of any other club participating in a UEFA club competition, or

  1. have any power whatsoever in the management, administration and/or sporting performance of any other club participating in a UEFA club competition…”

As discussed previously, the purpose of this rule is to seek to ensure the integrity of the UEFA competitions by setting out what amounts to “common ownership” and what should happen if two commonly owned clubs simultaneously qualify for UEFA’s competitions.

A former iteration of the UEFA common ownership rule was found to be enforceable by the Court of Arbitration for Sport in the 1999 case of AEK Athens and SK Slavia Prague v UEFA.  In that case, an investment vehicle had purchased stakes in clubs around Europe, including AEK Athens and SK Slavia Prague. When both clubs qualified for the 1998 UEFA Cup competition, AEK Athens was prevented from competing pursuant to the UEFA common ownership rule.

That rule was found to be enforceable and the current iteration lies in Article 5.  That rule states that, where two clubs qualify for the same UEFA competition, the one with the lower UEFA co-efficient ranking will not be allowed to compete.  In the case of Salzburg and Leipzig, that would be the German side.

UEFA has reportedly refused to comment on the position to date but has noted that there will be “more concrete information from the beginning of June, when the list of participating clubs taking part in UEFA European competitions is published.”

All of this leads to fans of the two clubs left in limbo over the summer period.  Will their clubs be able to compete in the UEFA Champions League next season?  Until UEFA releases its list, the position will not be clear.

This does however lead to a summer of hope for another set of fans.  For the clubs that finished below the two Red Bull clubs in the German Bundesliga and the Austrian Bundesliga respectively, there remains the possibility that those clubs will be called upon to fill the space of their Red Bull financed-compatriots, if it is ruled that one of those clubs cannot compete in UEFA competition in the 2017/2018 season.

Perhaps the summer will not be so boring after all.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Thomas Lloyd, Squire Patton Boggs Law Firm, Sports and Litigation Attorney
Associate

Lloyd Thomas is an associate in the Litigation department and is part of the Sports Law team based in our London office.

Lloyd provides a range of contentious and regulatory advice to a number of leading sports clubs, individuals and national governing bodies on a variety of issues. As part of such advice, Lloyd regularly assists in proceedings brought before the FIFA Dispute Resolution Chamber and the Court of Arbitration for Sport.

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