A new third tier European club competition looks to be on the horizon, with UEFA recently providing its initial approval for the new tournament, filling the gap left by the dissolution of Europe’s previous third tier continental tournament, the Cup Winners’ Cup, back in 1999.
Under the current proposal an additional 16 teams will have the opportunity to participate in UEFA club football, with the Europa League being reduced from 48 to 32 teams and the new tournament likewise featuring 32 teams. UEFA are also currently proposing that the new tournament be broadcast and sold online, a change that will no doubt concern television broadcasters given the current trend for greater online media consumption and the increasing competition from online companies in sports broadcasting.
For Clubs currently on the cusp of European football, a new tournament could provide not only the chance for European silverware, but potential commercial and brand building opportunities. Similarly for players and their representatives there may be possibilities to create additional value within players’ future playing and commercial arrangements. The following sets out some initial thoughts on the potential opportunities and issues a new tournament may bring:
#1 New media, new audiences – whilst the focus on online broadcasting is no doubt partly a testing ground for UEFA to consider the value of broadcasting beyond the traditional television model, it will also provide a platform for clubs to explore new opportunities around digital media. This may allow the targeting of new and younger audiences who increasingly consume content online and through social media rather than via television subscriptions. By combining online matches with greater social media and online interaction, clubs would have an opportunity to experiment with engaging new fans through these new digital mediums with limited risk as they continue to benefit from the existing league broadcast revenues.
#2 Club sponsorship – additional matches and wider audiences should provide clubs with increased sponsorship opportunities. It may be that participating clubs will wish to use the tournament to trial more bespoke sponsorship arrangements such as ‘European only’ match sponsors and partners, or simply use the additional profile as a means of raising the value of the existing sponsorship rights it sells. Regardless of their decision, it will be important for clubs to ensure that new and future arrangements are setup in order to avoid prejudicing future opportunities and restricting the rights the club can sell.
#3 Regulatory considerations – whilst greater opportunities for sponsorship may arise, clubs will need to be aware of the potential regulatory and legal issues around promotional activities outside of the UK. Clubs with alcohol or gambling/betting sponsors and partners will need to consider the various restrictions on promotional activities, including shirt sponsorship, which exist in various European territories. Clubs will also need to familiarise themselves with UEFA regulations around advertising, which differ from many of the domestic league regulations and can limit promotional activities and the rights that can be sold by clubs for European matches.
#4 Playing Contracts – a new tournament will not only bring opportunities for Clubs, but for players too. For those at clubs consistently on the cusp of European football, the new tournament may bring new opportunities to compete on a wider stage and establish a greater profile through on-field performances. These will need to be factored into negotiations around new playing contracts, with applicable bonus structures around tournament performances and appearances being considered.
#5 Personal endorsements – as with playing contract arrangements, players and their representatives will want to ensure that any new tournament is accounted for in any personal endorsement/commercial agreements, particularly where a player may be about to enter into any long term arrangements, with the tournament likely to commence in 2021. Alternatively it may be that the tournament provides a catalyst for increasing the value of any renewals or extensions of existing deals.
Whilst uncertainty remains, with the tournament yet to be fully approved and much of the detail remaining outstanding, a new tournament would undoubtedly provide new commercial opportunities for those who are able to participate in the future and may provide a platform for clubs to take centre stage outside of the shadow of the major domestic clubs in their league.
If you would like more information on any of the points raised above or any advice in connection with any potential commercial arrangements, please contact David Bentham (Partner) or David Anderson (Associate), or call 0161 672 5450.
Please note the information contained in this briefing is intended as a general review of the subject featured and is not intended as specific legal advice.