Over the past 24 hours we have seen news break about the potential creation of a new football “European Super League”. Gary Neville (taking a break from managing his vast investment portfolio to channel his man-of-the-people mode) took centre stage on Sky Sports last night to lambast the football teams who have “signed up” to this new league.
But from a legal perspective, has anyone signed up to anything? What are they up to?
Letter of intent
The media reports suggest that the 'members' of this new European Super League have signed up to a 'letter of intent'. We often see letters of intent in the construction and IT sectors.
The crucial thing to know about Letters of Intent in the context of this football discussion is that sometimes they constitute a valid and binding contract, and sometimes they don’t. Put another way, this new European Super League 'arrangement' might be nothing more than a piece of paper with no legal effect whatsoever.
The fact that the letter of intent seems to have come into existence on the eve of the announcement about the restructuring of the Champions’ League indicates that this letter of intent might be nothing more than a chess-move in a game of contractual brinkmanship; a show of strength by the football teams, but not a legally binding contractual commitment to do anything at all.
The potential dangers of expressions of intent
The Letter of Intent might not, in itself, constitute a legally binding contract, but the clubs involved should perhaps have exercised a bit more caution before going public with it. Setting aside the public opinion backlash that we’ve seen over the last 24 hours, there is also a potential legal downside to going public with one’s intentions.
Each of the football clubs has multiple contractual arrangements that are dependent on those clubs being able to play in the Premier League. Each of those clubs has a contract with the Premier League itself. Those clubs should remember that they can put themselves in breach of those contracts if they indicate an intention not to perform contractual obligations. This is known as an “anticipatory breach of contract”.
In simple terms, it is possible to put yourself in breach of contract by “shooting your mouth off”. In any event, there are usually better ways to negotiate.
Much ado about nothing
In reality, of course, this is most likely all about clubs and governing bodies manoeuvring to get more money and/or have more control. A European Super League might come into existence one day, but it doesn’t feel like that day has arrived. In the meantime, clubs should perhaps think twice about the potential public relations fall-out and contractual ramifications of airing their dirty, contractual laundry in public.
Editorial prepared by: Adrian Kerr, Partner, Mills Selig
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