Sports and competition law: the case of the salary cap in New Zealand rugby union
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ARTICLE
Sports and competition law: the case of the salary cap in New Zealand rugby union Gre´gory Basnier
Published online: 11 September 2014 T.M.C. Asser Instituut 2014
Abstract The legal environment of professional sports in Europe has been recently complemented by regulations adopted by sports federations and professional leagues aiming at preserving fairness in sports competitions and/or the economic viability of this sector (like the salary cap put in place in French professional rugby union from the 2010–2011 season and the UEFA’s financial fair play regulations). No formal decisions have been taken so far by the European Commission and the French competition authority on the compliance of salary cap regulations or other similar regulation tools with competition rules. Given this context, the decisions of the New Zealand’s competition authority (‘‘Commerce Commission’’) dealt with in this article are interesting as they relate to the salary cap put in place as from 2006 by the New Zealand Rugby Football Union in the domestic inter-provincial rugby competition. More particularly, the Commerce Commission’s first decision, dated 2 June 2006, is highly interesting as the Commerce Commission carried out an in-depth legal and economic analysis to authorise the entry into effect of the salary cap pursuant to competition rules
G. Basnier (&) 8, rue Jean-Pierre Timbaud, 75011 Paris, France e-mail: [email protected]
applicable in New Zealand. While these decisions should be analysed under the specific sporting and legal background of New Zealand, it is interesting to investigate what could be their practical and legal impact in Europe. Keywords Sport Rugby Salary cap Competition rules Anticompetitive agreements
1 Introduction The legal environment of professional sports in Europe has been recently complemented by regulations adopted by sports federations and professional leagues aiming at preserving fairness in sports competitions and/or the economic viability of this sector. In France, the rugby union professional league (‘‘Ligue Nationale de Rugby’’ or ‘‘LNR’’) has been a pioneer in putting in place, as from the 2010–2011 season, measures that limit how much money rugby teams may spend on player salaries (so-called ‘‘salary cap’’).1 Another current issue is the compliance of the financial fair play rules set up by the Union 1 Buy (2009) p. 11 – For the rules applicable to the 2013/2014 season, see the Regulation of the LNR’s ‘‘Direction Nationale d’Aide ˆ le de Gestion’’ or ‘‘DNACG’’ (‘‘National Directorate for et de Contro Support and Management Control’’), Annex 3 entitled ‘‘Re`glement relatif aux sommes et avantages dus aux « joueurs »’’ (‘‘Regulation on the amounts and benefits due to players’’). Article L.131-16 of the French sports code has clearly established the possibility for sports federations to adopt such systems. This article has been introduced by the law no. 2012-158, dated 1st February 2012, aimed at enhancing ethics in sports and athletes’ rights. It states that sports federations’ re
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