The Treaty on the Functioning of the European Union (previously the Lisbon Treaty) allows the European Union to create a sport policy in a supporting role, without harmonising EU legislation.

While it is important that the EU institutions recognise that sport should still be a competence of the member states and allow sport to be run nationally, it is hoped that the European Commission can create positive non-binding recommendations to EU countries which will help the future of sport across Europe.

It is also hoped that, given the EU definition of sport defined by the Council of Europe and used in the white paper on sport – grassroots and recreational sport will be given particular attention.

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1. Social and educational functions of sport

It should not be forgotten that sport is the largest social activity in Europe and is, in essence, hugely popular.

According to the European white paper on sport about 60% of Europeans participate in sport on a regular basis , while the drama of sports create a passionate following both at competitions and through television.

Policy changes which affect sport matter to hundreds of millions of people across Europe.

Social, health and community benefits are derived from well run clubs and sports organisations.

The fact that sport can have a positive effect on so many other policy streams provides both challenges and opportunities for the sport movement.

The multi-faceted benefits of sport emphasise the need for sport to be considered cross-departmentally – for example being an integral part of health ministry strategies across Europe.

It is also hoped that mainstreaming of sport successfully across these lines will allow sport to access funding for the benefit of the club and community. Some of the policy streams in which sport can play a leading role are:

a) Health

Regular physical activity can help prevent a host of diseases. Most obviously in the field of health, sport can help with an ever-growing obesity problem.

Children burn, on average in the UK, 600kcal per day less than 50 years ago and an adult’s decrease in energy expenditure since the 1950s is equivalent to running a marathon every week.

Encouraging activity and improving access and opportunity to play sport can obviously help, and simple principles such as rationalising current facilities and opening school facilities for community use outside school hours could be simple ways of increasing access.

b) Social Exclusion

Sport can help provide opportunities for young people and help combat the negative effects of social exclusion.

In terms of anti-social behaviour, studies have shown increased sporting activity has been linked to developing the type of personality more resistant to drug and alcohol addiction, while girls participating in sport are less likely to be sexually active at a young age and have teenage pregnancies.

Sport provides a focus for youngsters and a way to organize and apply meaning to their lives, something particularly important for children who lack role models in their home life.

c) Community cohesion and active citizenship

Sport has always provided great opportunities for community cohesion through its networks of community clubs and grassroots sport’s dependency on volunteering.

Sports clubs across the UK rely on volunteers from the community to function, with over 90% of clubs using volunteers and with each sport club averaging 21 volunteers. More people in the UK also volunteer in sport than any other sector.

d) Integration of immigrant populations

Sport can be used to help engage and integrate immigrant populations and has long been recognised across the world as benefitting diverse societies. Sport “has served to confront people with the social reality of multiculturalism.

Changes in public opinion and outlook have in part been shaped by ethnic involvement in sport.” A concrete example from the recent past was is Commonwealth England’s efforts to use the 2011 Delhi Commonwealth games to reach out to and integrate Indian minorities in the UK.

e) Integration of ageing populations

The European demographic is undoubtedly ageing, and sport can bridge the gap between generations.

While some of the more successful member states have limited drop off in participation as age increases (e.g. Finland sees no participation drop off from the 25-29 to the 60-64 year-old categories ), many member states rely on the elder generation for volunteering, coaching and as social members to create local sports clubs which interact with the whole community.

This interaction of course varies across sports, but many, such as golf, bowls, or shooting, will support active members for the entire age range.

What can the European Commission do?

1) Recommend the mainstreaming of sport in policy streams in member states.

2) Continue to mainstream sport in EU funding streams and further integrate sport into other EU departments' work.

3) Increase European funding for social projects in the field of sport.

4) Encourage clubs (professional and amateur) to provide specific programmes aimed at the social benefits of sport.

5) Recommend that member states encourage the opening of schools after hours for the use of community sports projects.

2. Funding of sport

a. Media rights and intellectual property rights

The sport sector is unlike any other in Europe, with grassroots sport relying on volunteers (over 90% of sports clubs in the UK use volunteers) and investment in grassroots sport heavily dependant on the success of media rights sales at the professional level.

For example, cricket in the UK receives much of its funding from selling its media rights, with a huge proportion of that coming from international match sales.

This funding has enabled cricket to implement the £30m (€27) Chance to Shine project which, in 2008, saw 226,844 children participate in the programme, involving 2,082 schools and 56,076 coaching hours.

More than 10,000 boys and girls have migrated from Chance to Shine schools into clubs – and it is this virtuous circle of reinvestment in grassroots sport which keeps sport alive across Europe.

In the UK the major sports sign up to the Alliance’s voluntary code which ensures that a minimum of 30% of domestic broadcasting revenue is invested by the sports rights owners directly into grassroots sport

This means that the value of media rights directly and proportionally affects the funding of grassroots sport. The value of this investment should not be underestimated, and it runs well over £200 million every year.

In difficult economic times, it is particularly important for sport to be able to generate funds in order to sustain itself. In order to successfully do this, sport needs to be able to utilise its own intellectual property rights and benefit from its huge appeal.

Intellectual property rights were not included at any length in the White Paper on Sport and it is vital that future EU policy work defends sports property rights, be it protecting media rights, counterfeiting, copyrighting, piracy or receiving fair return for use of its data, statistics and products.

It is hoped the draft decision on sport will closely examine sports intellectual property rights and help protect them.

The Lisbon Treaty affords the European institutions a competence in sport for the first time.

The Treaty says “the Union shall contribute to the promotion of European sporting issues, while taking account of the specific nature of sport“ and, while this does not mean (and in fact neither does sport want) an exemption from EU law, it is hoped that the specificity of sport in the media which has been previously outlined by the European institutions will be continued in the post-Lisbon era and extended to new media such as online and digital scheduling.

i) Solidarity mechanisms

The European sporting pyramid would struggle to function without the solidarity mechanisms which allow sport rights owners to collectively sell their rights and then redistribute the funds.

In order to maintain equitable balance and encourage fair sporting competition, the leagues can redistribute media funding as prize money much more equitably than if the large clubs defined their own media contracts.

In the German Bundesliga, for example, the top team receives only twice the prize money as the bottom club and in the English Premier League the redistribution ensures the Champions receive 1.65 times the amount of the last placed team.

Without collective selling, the gap between the rich and poorer clubs would be magnified greatly.

More important, perhaps, is the fact that the leagues and national governing bodies do not have to distribute all the media revenue to the clubs. This means that substantial investment in grassroots sport is therefore made a possibility.

The Alliance welcomes the Commission’s reiteration of its support for such mechanisms in the White Paper on Sport and hopes that the principle already established by the Commission will be formally recognised.

ii) Exclusivity

In 2003 the European Commission issued a competition decision concerning UEFA’s selling of media rights which has since served as a template for sports selling media rights.

In this decision and others (e.g. Premier League, Bundesliga ) the Commission has explicitly endorsed the notion of exclusivity, stating that “UEFA’s joint selling arrangement provides the consumer with the benefit of league focused media products from this pan-European football club competition that is sold via a single point of sale and which could not otherwise be produced and distributed equally efficiently”.

In this case there are benefits for:

• the consumer who does not have to subscribe to a host of media suppliers to follow one competition
• the media supplier who can increase revenue from advertising
• the advertisers who will have a defined target demographic
• sport which can improve revenue through exclusivity.

All these benefits are set out in more detail in the Commission’s 2003 decision.

While the Commission decision backs exclusivity in the sense of economic efficiency, the benefit to grassroots sport through solidarity mechanisms is another major factor for the sporting world.

Estimates suggest that the exclusivity of media rights can add substantially to a contract and this value correlates to a significant investment in grassroots sport.

A clear European example of the advantage to grassroots sport from exclusivity and collective selling is UEFA’s European Championships.

Here, the specific beneficiaries are often the smaller European countries and grassroots sport. 60% of revenue from the media rights from the tournament are redistributed to the national federations, with that money specifically ring-fenced for grassroots projects.

As this split is an equitable one, the smaller European countries would be proportionally hurt much more if exclusivity were to be prevented.

The Alliance hopes that exclusivity will continue to be supported by the European Commission both with respect to television and online rights.

iii) Territoriality

Sport is territorial by nature. National matches and competitions are watched more fervently by those from the hosting or participating countries.

This can be seen at a glance from the list of designated events which can be safeguarded for free-to-air television. While the lists include major world events like the Olympics, they serve as a clear demonstration that sports events – from the Giro d’Italia in Italy to the All-Ireland Senior Inter-County Hurling Finals in Ireland- are principally of importance territorially and likewise their value and appeal differs across Europe.

This has clearly been shown by interrogating the viewing figures of sports events. For example, through regression analysis of viewing figures in 54 countries in the six major football tournaments since 1998, it has been found that broadcasts which involved a match in which the home country played saw an extra 17.9% of the population watching the match.

This territorialism has been recognised by the Commission in its 2003 UEFA decision in which it notes that “media rights to football events like the UEFA Champions League are normally sold on a national basis.

This is due to the character of distribution, which is national due to national regulatory regimes, language barriers, and cultural factors.

The Commission therefore considers the geographic scope of the upstream markets for the media rights to be national”.

The result is that sport has a very different value depending on the territory in which it is being watched. It is important for both sport and Europe’s citizens that sport is allowed to be sold to media organisations territorially.

If this were not the case, only the largest media empires in Europe would win contracts and there is the possibility that smaller territories in which these organisations did not operate would receive less choice.

There is also precedent that live sport should be sold territorially as it is not a tangible good, and therefore the principle of exhaustion should not apply.

The ECJ has ruled in Coditel I (or Le Boucher) that there is a fundamental distinction between public performance and the circulating of physical copies and, while this ruling applied specifically to film, the same should hold true in sport.

What can the European Commission do?

1) Recognise the link between grassroots sport and professional sport. The separation of grassroots sport from professional sport in the white paper on sport is artificial and potentially damaging.

2) Defend the principles of territoriality, exclusivity and collective selling.

3) Recognise the omission of intellectual property rights in the white paper on sport and define the need for the protection of intellectual property rights in any future policy.

b) Lotteries and Gambling

Unlike many European countries, the UK does not have a monopoly national lottery directly funding sport. In the UK’s liberated gambling market, it is betting on sport rather than through lotteries that most impacts sport.

68% of British people (33 million) participate in some form of gambling. This figure has decreased from 72% in 1999.

The decrease is thought to be due to decreased National Lottery sales, while other forms of gambling actually rose in the same period by 46% to 48%.

In sports betting, betting on horse racing has increased from 13% to 17%, while 10% of males bet with a bookmaker on other sports and 7% bet on the last football world cup.

The sports betting market in the UK has grown from £7bn in 2001 to £38bn in 2008. The value of betting markets provides challenges for sport. The huge fluidity of markets provides the lure for match fixing.

Sport betting has increased dramatically in recent years, with the advent of global sporting markets and increased ease of data transfer.

Increased competition has seen bookmakers offer an increased variety of bets such as allowing bets on single football matches – previously in the UK only combination bets were allowed in order to prevent match fixing.

Bookmakers may not offer the zero tolerance that sports organisations would like as they may be prepared to live with losses from suspected fixers if there is sufficient (uninformed) money to the other side of the proposition to finance the pay-outs and still leave the bookmaker with a net win from the event.

Sport, however, must insure its own integrity and must pay for it – the International Cricket Council spends US$1m – 3m per year fighting match fixing and promoting integrity.

The integrity of sport and public trust is vital to sport and betting operators should contribute to a sustainable framework to prevent fraud.

It is disappointing that betting operators use sport’s products in order to make huge profits, without direct payment for the use of sports products and intellectual property.

A paper from the Remote Gambling Association in 2010 showed that of the €3.4 billion per annum provided to European sport by public and private sector operators, a massive €3.2 billion comes from statutory levies and lotteries.

In other words, countries forced to liberate betting markets and which lose statutory frameworks which require betting companies to contribute to sport will risk the destruction of the funding of sport in their country.

What can the European Commission do?

1) Recommend that member states create statutory frameworks to help fund sport through betting

2) Back the principle of subsidiarity in betting markets and allow member states to determine the best way to run their betting markets.

3) Recommend that sports organisations should have an intellectual property right (as outlined by the 2009 European Parliament in the Schaldemose Report) and support the extension of current French legislation on betting to other member states.

c) Funding of non-profit voluntary sports organisations

Sports across Europe rely on volunteers. Creating a European dimension on volunteering may be somewhat artificial, as volunteering is in fact more than even a national competence, but more accurately a local one.

To that end it may be better if the European Commission can influence the structures which affect the clubs themselves rather than the individual volunteers.

i) Parity with charity

While sports organisations often provide a non-profit community service, non-profit voluntary sports organisations do not automatically receive the benefits charitable organisations do in the UK.

This includes tax relief on donations and fund raising, implementation of business rates and corporation tax and relief on VAT on construction costs.

ii) EU VAT Directive

The European Union, through its VAT Directive, offers member states the opportunity to provide reductions in VAT for sports organisations. In the UK, as in many member states, the reductions are not fully implemented.

Sports clubs undertake activities which fall outside current exemptions, but which could also be brought within it such as match fees, catering and transport, parking, social events at clubs and non-playing memberships.

Furthermore exemptions often do not apply to temporary members or visitors to clubs, and if one of the aims of government and Europe is to get more people active, as opposed to keeping those who are already active exercising, serious consideration should be given to addressing this discrepancy.

VAT exemptions could also be expanded for sports organisations which buy products or services.

Even if you are a charitable body, your club will be charged VAT on most goods and services you buy, including building work such as the construction of pavilions and clubhouses. Therefore much VAT is irrecoverable.

iii) Corporation tax

The UK does not have a corporate tax exemption for national governing bodies.

The rest of the EU 27 (excluding Bulgaria where no information was given) does have exemptions, according to a survey by Deloitte , which shows:

• all 25 countries exempt national olympic associations from corporation tax
• 14 have specific corporate tax exemptions for NGBs
• the other 11 have specific tax relief for sport.

iv) Bureaucratic burdens on sports clubs

Sports clubs are generally run by volunteers, and it should be made as easy as possible for these volunteers to successfully run their clubs. In particular government should guard against unintended consequences of other legislation.

For example the UK Licensing Act 2003 increased the cost for sports clubs to run a bar, with fees often equivalent to local pubs and clubs despite limited takings. Estimates suggest sports clubs lost out by £2.6m in the first year of the Act.

Bureaucracy and unintended consequences of non-sporting legislation can directly cost sports clubs money or take up valuable time for volunteers.

An important way of reducing the burden on clubs would be to ensure sports clubs can be run as efficiently as possible without the unintended affects of non-relevant legislation.

What can the European Commission do?

1) Recommend that member states implement reduced rate VAT as defined in the VAT directive.

2) Recommend that non-profit sports organisations receive exemptions in corporation tax.

3) Produce a study comparing charitable status and non-profit community sports club status in the member states.

4) Monitor European legislation for unintended consequences for sport and recommend best practice to member states based on the recent study on volunteering in Europe.

3. Fairness and physical and moral integrity

a) Free Movement of People

Free movement of people is a fundamental principle of the EU, and it is important that sport operates within this ideal.

Recent support from the European Commission for the principle of home-grown players in UEFA’s football proposals is not only important for sport, but shows how sports can work effectively with the European institutions.

The Alliance welcomes the Commission’s recent statement on UEFA’s home-grown player initiative. However this is very much the start of the process both in football and in other sports, and it must be recognised that there is a great deal yet to be done.

The plan to ensure each 23 man squad has eight home-grown players could well have some perverse consequences, and it is sensible that the Commission has a commitment to examine the implementation of the rule in 2012.

The effect of the scheme on the exploitation of minors, movement of young professionals, compensation mechanisms for academy players and youth contracts is unclear.

Despite increasing clarity on the effect of the EU on the make up of sport and sporting fixtures (Kolpak, Simutenkov and Cotonou, home grown players ), special cases on quotas and nationality do still arise and sport should be regarded with careful consideration.

For example, national championships do have an important cultural place in society and care should be taken to preserve such competitions.

While in some sports a national champion could be found in an open field of competitors, sports which require heats to reach the finals (e.g. boxing) could see erroneous outcomes.

Free movement does not only concern sportspeople, but is also very relevant to coaches, officials and others working in the field of sport.

While the development of education, training and the European Qualifications Framework (EQF) in sport was highlighted in the White Paper on Sport (Action 7) in order to aid mobility of sportspeople and the transferability of skills, more needs to be done in sport to ensure qualifications are recognised across Europe.

DG EAC should insure it is well placed to influence work on the transferability of qualifications.

What can the European Commission do?

1) Support sports in creating home-grown player rules which meet the criteria of necessity, proportionality and legitimacy.

2) Continue to reject proposals for quotas which are directly discriminatory in both the professional and amateur game

3) Protect the specificity of sport for national competitions.

4) Re-examine the transferability of sporting qualifications through the professional qualifications directive and ensure transferability of sport qualifications in conjunction with DG Employment and DG Market

b) Doping

The fight against doping must complement not duplicate current efforts. Given the structures defined in sport to fight doping and the existence and impact of WADA, it is hoped that any efforts made by the Commission in the field of doping will be supportive rather than duplicative.

It is understood that where doping procedure interacts with areas of EC law (e.g. data protection) then of course the Commission will need to act.

What can the European Commission do?

1) Not replicate anti-doping institutions created by the sport movement.

c) Betting integrity

As outlined in the section on gambling and betting, the integrity of sport and public trust is vital to sport and betting operators should contribute to a sustainable framework to prevent fraud.

It is very important that sports understand the threats of match-fixing and educate their players in the hazards they face. In the UK the sport movement has taken steps to address such issues by creating a Sports Betting Group.

The initiative brings together national governing bodies and players’ federations to ensure a co-ordinated approach to betting integrity, including ensuring that sports rules, regulations and education programmes are co-ordinated and integrated into sports statutes.

What can the European Commission do?

1) Encourage sports organisations and players’ federations to clarify regulations in their statutes and commit to an education policy on young players.

2) Recommend sports organisations have the right to identify which bets should and should not be available on their product and ensure that bookmakers divulge all requested information to sports organisations with respect to betting patterns.

4. Dialogue and governance

a) Structured dialogue

The current mechanisms for structured dialogue in the field of sport have served well since the white paper on sport in 2007. In the UK it is strongly believed that, because of the nature of sport in Europe, dialogue should include not only international and European representatives, but also representatives of national sport voices.

While there have been discussions on a far more limited group of organisations representing sport at a European level, it is important to recognise that sport is still a competence of the member states and most decisions affecting sport occur at a local level where there are distinct national, cultural and sporting differences.

Any structured dialogue should take the local and national effect of sport into account and structured dialogue must contain national organisations for a fair and democratic debate.

What can the European Commission do?

1) Continue to engage sport organisations through structured dialogue as outlined in the white paper in sport, ensuring national representation in discussions.

b) Good Governance

The sector encourages good governance across its governing bodies and welcomes any opportunities to improve.

However, as when considering structured dialogue, it is vitally important to once more recognise the distinct national, cultural and sporting differences which exist across Europe.

A one-size-fits-all approach will not work. A simple model of an international, European and national pyramid of sporting governance is not realistic and what may be pertinent to football is irrelevant in other sports.

Some sports have no appropriate or dynamic European bodies to control such licensing (rugby league, cricket, rugby union) and some sports have no genuine elite club competition (tennis).

Other sports vary hugely in size and capabilities across Europe (ice hockey, cricket, handball) and there is simply no magic formula when it comes to European governance.

Particular caution should be given to pan-European or international licensing requirements which impact on national sport.

While it is right that in order to play in international competition sport clubs should attain the required standard stipulated by the international body, national competitions should be run nationally and the autonomy of national sports organisations and leagues respected.

What can the European Commission do?

1) Promote good governance in sport while respecting the subsidiarity of sport and recognising member states’ sporting organisations' autonomy in defining how sport is played in their countries.

Originally part of the Alliance's response to the EU 2020 consultation (2010).