EXPERT LEGAL OPINION ON ESCALATING 'WAR' BETWEEN BBBofC AND FRANK WARREN PROMOTION - CHISORA - HAYE CALLS FOR COMMONSENSE TO BE GIVEN VOICE

THE MEDIA SPOTLIGHT IS ON THE 14TH JULY FRANK WARREN PROMOTION CHISORA - HAYE BUT THE THREAT BY BBBofC TO SUSPEND THE UNDERCARD BOXERS, THEIR MANAGERS, TRAINERS, SECONDS; MATCHMAKERS, MC's, WHIPS AND OTHER PERSONNEL IS SERIOUS ESPECIALLY AT A TIME THIS COUNTRY IS IN A DEEP FINANCIAL CRISIS. WHY IS THIS NECESSARY WHEN THE PROMOTION IS LAWFUL AND THE STANCE TAKEN BY BBBofC COULD BE UNLAWFUL? =====================================

PULLING THEIR PUNCHES: THE BRITISH BOXING BOARD OF CONTROL UNDER DOUBLE THREAT FROM LUXEMBOURG. Mr. Angus MacCulloch, Senior Lecturer, Degree: LL.B. (Hons.) (Dundee), LL.M. (European Law)(Strathclyde), M. Phil. (Manchester), Dip. LP Associated research centres and groups: Corporate, Commercial and Consumer Law , International, European and Comparative Law. Current Teaching EC & UK Competition Law; EU Law; Business Law & Regulation Legal Opinion by Mr. Angus MacCulloch British Boxing has never been a place for the faint hearted and it looks to be entering into a new era of internal strife. The announcement that Frank Warren intends to promote a bout between disgraced heavyweights David Haye & Derek Chisora in July 2012 has resulted in threats of disciplinary and legal action. Fight fans’ interest in a showdown between the two men was whetted by an unscheduled, and unseemly, brawl at a post-fight press conference after Chisora’s defeat by Vitali Klitschko. Boxing has never been slow to capitalise on pre-fight antagonism between boxers and this feud looked too good a commercial prospect to miss. The main problem for any promoter was the fact that neither boxer has a license issued by British boxing’s governing body; the British Boxomg Board of Control (BBBC). Haye’s licence lapsed after he announced his retirement in 2011, and Chisora’s licence was indefinitely ‘withdrawn’ after the events surrounding the Klitschko fight. Frank Warren’s approach to this problem was to look to the EU for a solution. The fight is to go ahead in July sanctioned by the Luxembourg Boxing Federation. The BBBC response to this challenge to their control over boxing in the UK was immediate. They published a Notice that any involvement by a UK boxing licence holder in the Luxembourg backed fight would be deemed to be a ‘repudiation’ of the BBBC’s Constitution and would be considered a ‘termination’ of their membership and licence. Any attempt to remove Warren’s BBBC licence, or any other person involved in servicing or supporting the fight, could well result in legal action. It is striking that the BBBC’s stance on the legality of LBF to sanctioning fights in the UK could be challenged under EU law and lead to another, more mannered, dispute before the Court of Justice back in Luxembourg. Two areas of EU law would come into play in such a dispute, but before discussing the specifics it is important to note that while sport has a special place in EU Law, following the Amsterdam Declaration on Sports and enhanced EU competence in Art 165 TFEU, the main provisions of EU law apply normally to professional sport – as to any economic activity in the EU. Amateur and Youth sport do receive special treatment, but this is not relevant in the case of professional boxing. Freedom to Provide Services The first question which is useful to address is whether the LBF is permitted, under EU Law, to stage boxing matches in other EU Member States; can it provide its ‘service’ across the whole of the EU, including the UK? But the question can also be alternately phrased: can the BBBC lawfully take steps to hamper the LBF’s entry into the UK boxing scene? In case C-438/05 Viking the Court of Justice made it clear that collective action to deter an undertaking from exercising its freedom of movement falls under EU law. The actions of the BBBC to require all its licence holders to support its policy, and isolate the activities of the LBF, could fall within EU law. It also stressed that freedom to provide services would be compromised if the abolition of State barriers could be neutralised by other organisations (at [57]). Although Viking itself was concerned with the Freedom of Establishment the CJEU has adopted similar reasoning across the whole of free movement jurisprudence. It is also clear from Viking that restrictions on those freedoms may be justified on some other ground; the special nature of sport would fall within that category. Before the BBFC could successfully argue that their collective action to discourage the LBF’s activities in the UK they would have to prove that they could not successfully achieve their purely sporting objective through any other means that was less restrictive of EU freedoms (at [87]). As I will suggest below the BBBC’s position appears to be based on prestige and economic concerns rather than a higher sporting motive. Competition Law The other area of legal interest is competition law. Where sport has becomes a person’s profession they clearly have a strong economic interest in being able to continue participating at the highest, and most lucrative, level. Any attempt by a sporting body to limit a person’s ability to compete, and earn, is potentially challenged as a ‘restraint on trade’. As sports governing bodies are often formed as a national collective of interested people it is easy to see how their decisions can be challenged under Art 102 TFEU as an abuse of a dominant position, by the national body acting an authority, or under Article 101 TFEU as a result of being characterised as an anti-competitive agreement, between the various stakeholders within the body. An example of how this unlawful restraint of trade argument can play out was seen in Case C-519/04P Meca-Median The case involved two swimmers who challenged an IOC/FINA doping ban as being contrary to EU law. Initially, the CFI (in Case T-313/02) exercised the ‘sporting exception’ and made the judgment that the bans were a sporting matter, analogous to the rules of the game, and fell outside the ambit of the Treaty; which only covered economic activity. The Court of Justice reversed this finding as (at [24]) it was clear these rules regulated ‘gainful employment and the provision of services’. The Court made it clear that it is very difficult to separate sporting and economic questions in professional sport. Where it is claimed that sporting rules are required they must be assessed to see whether they fulfil the terms of the Treaty provisions (at [28]). A licence ‘withdrawal’, or ban, can be assessed regarding its compatibility with the competition provisions. The Court applied the Wouters test (Case C-309/99) where the sporting justification for the restriction is considered in the overall context in which it is taken and produces potentially anti-competitive effects. In Meca-Medina the judgment was that the doping bans did not constitute a restriction on competition as they were ‘justified by a legitimate objective’; that being the ‘proper conduct of competitive sport’ (at [45]). Whether the BBBC could justify, on sporting grounds, the ‘termination’ of any BBBC licences for being involved in the Hay/Chisora fight is interesting. There could no doubt be an argument based on the BBBC’s record as being a leader in boxing safety, but its stance looks to be driven by its desire to maintain its position as the only body able to sanction boxing in its ‘jurisdiction’. It is more difficult to see how that is simply a matter of the proper conduct of sport, as opposed to its maintenance of market position through the restriction of competition, and, ultimately, its economic interest. The same sort of sporting justifications would be relevant in the free movement questions outlined above. Another interesting issue arises out of the BBBC Notice where they indicate they have made their position clear to the European Boxing Union. An attempt to reach out to the wider European boxing world, presumably to put further pressure on the LBF, might also be considered as potentially unlawful under the competition rules. EU competition law has always taken a very strong line in any situation where an undertaking has attempted to ensure absolute territorial protection across a national territory. If the BBBC were seen as colluding with other national boxing Federations to carve up the European Market State by State they could be entering difficult legal waters. The potential, of course, exists to try and justify the necessity for such territorial restrictions, which have been accepted in relation, for example, to international sporting events, but it is again difficult to see how such sporting arguments would apply to professional boxing. What is the legal position of the BBBC? Without undertaking a detailed analysis of the web of relationships that exist across the professional boxing world it is difficult to come to a clear conclusion. But on the basis of the simple analysis set out above it would appear that there are significant EU questions which stand in the way of the BBBC continuing to protect their position as the sole, or monopoly, authority in relation to boxing in the UK. Ironically many of their legal problems come from the fact that they hold such a position of power in the UK sport. They would be well advised to be careful before acting rashly and taking steps which could be perceived as limiting any persons freedom to undertake their boxing related profession; whether that be as boxer, promoter, trainer, or cornerman etc. Professional boxing already has an arguably tenuous relationship with loftier sporting ideals; economic concerns and pay-TV appear to be the biggest driving factors in many decisions taken in relation to the sport. It will be interesting to see if the sport’s authorities are able to justify its current organisational arrangements on the basis of special considerations given by EU law to ‘the proper conduct of competitive sports’. ~ Our grateful thanks to Mr. Angus MacCulloch and Anita Davies, Legal Information Officer Matrix Chambers Griffin Building Gray’s Inn London WC1R 5LN Tel: +44 (0) 20 7404 3447 Fax: +44 (0) 20 7404 3448