Premier League v Leicester: What the PSR case tells us about competition law in sport

Of particular interest to me is what the decision says about 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝗼𝗻 𝗹𝗮𝘄’𝘀 𝗿𝗼𝗹𝗲 𝗶𝗻 𝗺𝗼𝗱𝗲𝗿𝗻 𝘀𝗽𝗼𝗿𝘁𝘀 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻. The Commission spent real time engaging with the Chapter I (restriction of competition) and Chapter II (abuse of dominance) arguments advanced by LCFC’s legal team, in light of competing economic evidence and the post-Meca-Medina / post-European Super League framework. Four aspects of the competition law analysis stood out.

Financial regulation in sport is not immune from competition law scrutiny

The Commission treated PSR as the Court of Justice of the European Union's Meca-Medina (2006) case envisages: not benefitting from a broad exemption, but assessed by reference to 𝗹𝗲𝗴𝗶𝘁𝗶𝗺𝗮𝘁𝗲 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲𝘀, 𝗻𝗲𝗰𝗲𝘀𝘀𝗶𝘁𝘆 𝗮𝗻𝗱 𝗽𝗿𝗼𝗽𝗼𝗿𝘁𝗶𝗼𝗻𝗮𝗹𝗶𝘁𝘆.

It correctly emphasised that the category of 𝗿𝗲𝘀𝘁𝗿𝗶𝗰𝘁𝗶𝗼𝗻 ‘𝗯𝘆 𝗼𝗯𝗷𝗲𝗰𝘁’ is a narrow one: 𝘢 “𝘮𝘦𝘢𝘴𝘶𝘳𝘦 𝘵𝘩𝘢𝘵 𝘭𝘪𝘮𝘪𝘵𝘴 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘥𝘰𝘦𝘴 𝘯𝘰𝘵, 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘮𝘰𝘳𝘦, 𝘧𝘢𝘭𝘭 𝘸𝘪𝘵𝘩𝘪𝘯 𝘵𝘩𝘢𝘵 𝘤𝘢𝘵𝘦𝘨𝘰𝘳𝘺”. Financial controls were accepted as pursuing legitimate aims (sustainability, competitive balance, integrity), and in this case their economic effects on clubs were characterised as inherent consequences of regulation, not distortions of competition.

The Commission’s reasoning also shows that 𝗼𝗯𝗷𝗲𝗰𝘁𝗶𝘃𝗲 𝗷𝘂𝘀𝘁𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 should not be an afterthought, but something that is built into the very rationale for financial regulation. That framing, and the distinction it draws, is relevant: competition law operates as a tool for disciplining regulatory design, not for second-guessing legitimate sporting rules.

Sporting advantage does not equal exclusionary abuse

Leicester City Football Club's Chapter II case – that PSR enforcement and cross-league sanctioning amounted to exclusion or foreclosure – was dismissed.

Drawing on the European Super League judgment, the Commission drew a clear distinction between:

• 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗰𝗼𝗻𝘀𝗲𝗾𝘂𝗲𝗻𝗰𝗲𝘀 for breaching universally applicable rules, and
• 𝗲𝘅𝗰𝗹𝘂𝘀𝗶𝗼𝗻𝗮𝗿𝘆 𝗰𝗼𝗻𝗱𝘂𝗰𝘁 that blocks access to a market or competition.

Points deductions may affect sporting outcomes, but that’s not the kind of foreclosure competition law is concerned with. More broadly, the decision reflects a growing judicial confidence in applying European Super League in a measured way – using it to police transparency and exclusion, rather than as a general weapon against sports regulation.

Expert economics mattered - but so did the structure of sport

The Commission ultimately accepted The Premier League's case that PSR constrains behaviour through 𝗿𝘂𝗹𝗲𝘀 𝗮𝗻𝗱 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀, not through exclusion or discrimination. It recognised a feature of the Premier League and EFL that is often under-emphasised: sport does not resemble a 𝗰𝗼𝗻𝘃𝗲𝗻𝘁𝗶𝗼𝗻𝗮𝗹 𝗽𝗿𝗼𝗳𝗶𝘁-𝗺𝗮𝘅𝗶𝗺𝗶𝘀𝗶𝗻𝗴 𝗺𝗮𝗿𝗸𝗲𝘁, and clubs are structurally prone to overspending in pursuit of sporting success.

The decision also illustrates the challenges of building competition cases on counterfactuals. Attempting to model “but for” worlds in a sector characterised by 𝗮𝘀𝘆𝗺𝗺𝗲𝘁𝗿𝗶𝗰 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀 and 𝗱𝗶𝘀𝘁𝗼𝗿𝘁𝗲𝗱 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗱𝘆𝗻𝗮𝗺𝗶𝗰𝘀 is complex, and the Commission was clearly sceptical of counterfactuals that risked creating distortions of their own.

Endorsement of regulatory architecture?

The decision supports the view that PSR operates as a 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝗼𝗻-𝗹𝗮𝘄-𝗰𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝘁 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗳𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 – one that is coherent, proportionate, and rule-based.

This point is likely to assume greater significance as the Premier League transitions towards its new 𝗦𝗾𝘂𝗮𝗱 𝗖𝗼𝘀𝘁 𝗥𝗮𝘁𝗶𝗼 (𝗦𝗖𝗥) regime. PSR may no longer be the primary behavioural constraint from next season, but if SCR is challenged on competition law grounds – and, given the stakes for clubs and communities, it almost certainly will be – the decision provides a useful indication of how that battle may be approached.