City AM quotes Darren Bailey on the compliance of NBA Europe's format and salary cap with EU law

This week, the NBA stated intentions to launch a new league in Europe. In a joint appearance with the head of Fiba, basketball’s international governing body, NBA commissioner Adam Silver spoke of the “enthusiastic support” within both organisations to push ahead with the plans.

Should it progress as planned, NBA Europe will feature 16 teams in a semi-open format, with 12 permanent members and four places available for qualifiers. The teams are likely to be a mixture of existing European giants, such as Barcelona and Real Madrid, and new ones, some linked to football clubs such as Paris Saint-Germain and, reportedly, Manchester City.

Giving a reaction to the development, Darren Bailey, Consultant in our Commercial team, comments in City AM. Darren explains:

NBA Europe is an interesting concept. US owners and investors will look to make a profit so they will definitely want to ensure cost control measures are in place.

"Frankly, competition law is being deployed to attack all forms of regulatory frameworks at present so there may be a vulnerability, but a key issue is who are the likely complainants.

"Much depends on the structure and access of teams. If it looks like it will be a success and the process for admission is not meticulously fair, then excluded teams may look to challenge.

"In addition, players and agents may be encouraged to have a crack if they believe the market is being distorted and salaries/fees being unreasonably suppressed.

Darren goes on to explain why European courts may decide to give the NBA some leeway if it were viewed as a startup backed by big money, as some new sports leagues have been when agreeing long broadcast deals - although, he notes, the tendency for European judges to promote free markets in sport since the landmark Bosman ruling calls that into question. Darren continues:

What will be fascinating is how they structure the inevitable collective bargaining agreement and player representation. My sense is they will adopt the US model and look to defend it if attacked based on various sporting and economic grounds such as uncertainty of outcome, wider talent distribution, fair allocation of revenue to players (circa 70 per cent) etc. 

"Who knows, the Americanisation of regulatory frameworks may repel some of the arguments we have seen play out recently in the European courts.

"In my view if the courts don’t back off attacking sports regulations designed to protect key sporting imperatives, then national governments and the EU will need to grant exemptions from elements of competition law otherwise investors will disappear.

Read the full article in City AM here.