Competition Law in Sports: It’s Time to Talk About Merger Control

By: Matthew Twedell (The Thicket/Geradin Partners)

When the US played host to FIFA’s World Cup in 1994, it reportedly spent $500 million on the tournament. In contrast, by 2022, Qatar had spent an astounding $220 billion. This highlights how sports have evolved into “big business,” which naturally brings them under the scrutiny of competition law.

There are three primary areas of competition law enforcement: (1) the prohibition of anti-competitive agreements, such as cartels; (2) the prohibition of abuses of dominance, including monopolies and excessive pricing; and (3) merger control. Recent decisions by the European Court of Justice (ECJ) have clarified how competition law on anti-competitive agreements and abuses of dominance applies to sports. For instance, UEFA and FIFA’s attempts to block the breakaway Super League were deemed breaches of EU competition law. Additionally, enforcing “homegrown player rules” in professional football has been found to potentially restrict EU competition law. However, merger control in sports has not been as prominent in recent years.

This year is shaping up to be significant for sports mergers and acquisitions. Liberty Media, the owner of Formula One, has announced plans to acquire Dorna Sports, the parent company of MotoGP, for over $4 billion, with the intention of uniting the two racing series. Recently, the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund valued at over $700 billion, made waves by reportedly offering $2 billion to merge the leading professional tennis tours—the ATP and WTA. This follows a similar development in golf, where the PGA Tour and DP World Tour announced plans to merge with the LIV Golf tour, which is created and owned by the PIF. This merger was unexpected, given the previous public disputes between the parties, including politically charged comments from PGA Tour Commissioner Jay Monahan about LIV Golf.

Though these sports deals are still in their early stages, they raise important questions: Will they receive approval from competition regulators worldwide?

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