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"Sports Autonomy" in the European Union

Greg Mankiw notes a BBC story on FIFA President Sepp Blatter's latest missive on autonomy for sporting organizations in the Europe. Blatter and his comrades want a rule restricting the number of foreign players on a team, ideally a "6 + 5 system," the equivalent of a local content rule. The title of Greg's post, "The Latest in Trade Restrictions," neatly captures the essence of Blatter's ploy, although though this issue has brewing for some time.

Phil Miller pointed this out and asked a sports economist's question: what I thought such a rule would do to competitive balance. A complete answer would require an examination of just how binding a rule such as a 6 domestic player minimum would be throughout Europe. But in the English Premier League, it is obvious that the best teams are very well stocked with the best foreign players. Arsenal - currently on top of the league standings - put out an all-foreigner side these days more often than not. The proposed rule is aimed directly at them, and the other big English clubs. The constraint would bind on them, and some of their top foreign players would move to clubs that are historically weaker. But the next best alternative is likely still in England -- the EPL is the world's richest league, with the most at stake and hence the highest demand for talent. Offsetting that flow would be English players moving to the top clubs. Within England, the talent gap between the top and bottom clubs would shrink.

TSE has been following the autonomy issue in the EU for some time. The EU says sport does not require exemptions to rules governing commerce. Blatter objects, but his "autonomy" argument is weak. He states that "players are more artists than workers," an echo of "baseball is entertainment, not commerce" in the flawed Supreme Court decision which gave MLB its antitrust exemption. Moreover, he says this as if English artists could be blocked from painting in Paris under French Law (they can't, as such a rule would breach EU competition policy). And further, Blatter claims that "football players are not employees in the conventional sense of the term. You need 11 of them on the pitch, and it is not at all the same thing as being an employee in a given company." What an absurd, shameless statement!

As I said in June, I think the real purpose behind the autonomy ploy is to protect the domestic only league restriction that governs European soccer.

The home-grown requirements are not exactly anti-trust issues, but still require exemption from EU competition rules. Regardless, the push to protect that rule is a smokescreen to protect UEFA's "domestic-only" rule for league competition. That is the rule which prohibits, for example, Belgium, Holland, and Scotland from forming a league and actually generating some decent competition among their larger clubs. EU guidelines clearly prohibit such nonsense, yet the domestic-only leagues persist.

Stefan Szymanski, has some thoughts and links to related issues of governance in European Football here. The comments of Arsenal's Arsene Wenger on this issue, as usual, are also worth reading.

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