On 1 March 2022, the RFU announced that no Championship club had met the Minimum Standards Criteria for entry to the Premiership ahead of the 2022/23 season. As such, the winner of the Championship this year will not be promoted – subject to an appeal against the RFU’s decision (the “Decision”).

Doncaster Knights, Ealing Trailfinders, Cornish Pirates and Jersey Reds are all battling it out at the top of the Championship table in what is the closest run second tier season for many a year (owing to the Premiership’s expansion to 13 teams).

From the top four, only Doncaster and Ealing applied to the RFU for the approval required to be promoted this year. This application process – though not entirely transparent – requires the Championship clubs to satisfy the RFU, via an independent audit, that they meet the Premiership’s Minimum Standards Criteria, in order to be eligible for promotion.[1]

Unfortunately, their applications failed. Thus, as things stand, despite the RFU’s decision last year to allow the Premiership to expand to 14 teams from the 2022/23 season, neither Doncaster nor Ealing (nor any other Championship club) can be promoted this year.

However, there is an independent arbitration process by which both clubs are entitled to appeal, and both clubs are expected to do so. This article will therefore seek to explain the Decision and consider some of the arguments that might be made on appeal.

1. Minimum Standards Criteria

The Minimum Standards Criteria (the “MSC”) are a set of standards for the Premiership agreed by the Professional Game Board (the “PGB”) – made up of representatives from the RFU, Premiership Rugby, the Rugby Players’ Association, and the Championship clubs – and approved by Premiership Rugby and the RFU.[2] Certain of the MSC must be met by any club wishing to join the Premiership from the Championship and are a condition of entry.[3]

Unfortunately, the MSC are not publicly available (which is disappointing from a transparency and good governance perspective).

However, the RFU’s announcement explains that one of the MSC is that “the [nominated] stadium must hold a minimum of 10,001 fans” (the “Minimum Capacity Requirement”). It adds that the Minimum Capacity Requirement exists:

…to ensure the ground falls under the remit of the Sports Grounds Safety Authority (SGSA), regulated by the Department for Digital, Culture, Media and Sport (DCMS), and the Green Guide, as well as to be of a standard suitable for the top league of one of the nation’s major sports.

As part of their application to be considered eligible for promotion, Championship clubs must nominate the ground at which they would play their home matches. This is then independently audited to assess the ground’s compliance with the MSC, and the club’s eligibility is determined accordingly.

2. Decision

The RFU’s announcement explained that:

Ealing Trailfinders does not currently have a licensed capacity, but the ground holds approximately 5,000 with 2,115 seats.

Doncaster Knights currently has a capacity of around 5,183 with 1,926 seats.

As a result, the independent audit has found that neither club has successfully met the minimum standards criteria based on capacity (as well as other factors). The PGB therefore made a recommendation to RFU Board that neither club could be promoted to the Premiership for the 22/23 season. The RFU Board has ratified this decision.

Both clubs have suggested they could seek to expand their facilities however no formal planning permissions are in place for this to happen. Neither Doncaster Knights nor Ealing Trailfinders proposed ground-share arrangements in their applications.

The effect of the Decision is thus that neither Doncaster nor Ealing are eligible for promotion, having failed to meet the Minimum Capacity Requirement, as well as “other factors”, though it is not clear what is meant by the latter.

3. Appeal Process

As noted above, Doncaster and Ealing have a right of appeal against the Decision via an independent arbitration process. Doncaster have already confirmed that they will appeal, while Ealing are expected to follow suit.

Little information is publicly available about the appeal process, but some guidance can be taken from the London Welsh case.

In 2012, London Welsh was deemed ineligible for promotion by the RFU on the ground that it did not satisfy the MSC and, specifically, the requirement that clubs have primacy of tenure over their home ground (the “Primacy of Tenure Requirement”). London Welsh appealed that decision to an appeal panel consisting of three QCs and were successful, on the basis that the Primacy of Tenure Requirement was contrary to EU and UK competition law and was thus void.

It is not clear whether these appeals proceed by way of a review or as a de novo appeal on the merits, or the timescales within which it is to be brought, though this is immaterial for present purposes.

4. Grounds for Appeal

Doncaster’s statement on the Decision explained that the club has “every confidence that the required capacity could be delivered for season 2022/23 with a stand-by ground now being available should unexpected delays occur”. This implies that the club considers that it does actually meet the MSC – or, at least, would do by the start of the 2022/23 season. They may thus appeal the Decision on that basis, arguing that it was wrong on the merits and should be overturned.

However, as this author is not aware of the relevant facts surrounding Ealing and Doncaster’s applications, the full MSC, or the procedures of the appeal, the remainder of this article will focus on the legal arguments that could be raised in respect of the Minimum Capacity Requirement itself.

4.1 Legal principles

Primarily, as in the London Welsh case, the clubs may seek to challenge the Minimum Capacity Requirement under UK competition law.

Following a line of EU competition case law (which continues to be relevant post-Brexit by virtue of s.60A of the Competition Act 1998), a prima facie restriction of competition/abuse of dominant position will not be unlawful if it is a proportionate means of achieving a legitimate objective, provided that the restriction of competition is inherent (i.e. necessary) in the pursuit of the legitimate objective.[4]

In London Welsh v. RFU, the RFU accepted that it was subject to competition law, that it held a position of dominance in the relevant market and that the Primacy of Tenure Requirement was, prima facie, a restriction of competition and an abuse of its dominant position.[5] The focus then turned to whether the anti-competitive nature of the rule could be justified, or whether it was unlawful. The appeal panel found that it could not, as the Primacy of Tenure Requirement was not inherent in the pursuit of the RFU’s legitimate objectives of maintaining and increasing the general health and popularity of the sport and enabling fixture organisation.[6]

In this author’s view, the position is likely to be similar here. Having previously made such concessions, it would be difficult for the RFU to argue to the contrary and, like the Primacy of Tenure Requirement, the Minimum Capacity Requirement appears to be a prima facie restriction of competition[7] and an abuse of dominant position,[8] as it restricts entry to the elite professional rugby market (i.e. the Premiership). Thus, as in London Welsh, it seems likely that the crux of the argument would be as to whether the anti-competitive nature of the Minimum Capacity Requirement can be justified.

4.2 Application to the Minimum Capacity Requirement

The key issues in the present case are thus:

(a) What are the objectives of the Minimum Capacity Requirement?

(b) Are those objectives legitimate?

(c) If so, is the Minimum Capacity Requirement (and the resulting restriction of competition) inherent in pursuit of the legitimate objectives?

(d) If so, is the Minimum Capacity Requirement (and the resulting restriction of competition) proportionate to the pursuit of the legitimate objectives?

If the answer to questions (b), (c), or (d) is “no”, the Minimum Capacity Requirement will be unlawful and thus void. It could not therefore be applied to prevent Ealing or Doncaster being promoted.

As noted above, the justifications for the Minimum Capacity Requirement given by the RFU are:

to ensure the ground falls under the remit of the Sports Grounds Safety Authority (SGSA), regulated by the Department for Digital, Culture, Media and Sport (DCMS), and the Green Guide, as well as to be of a standard suitable for the top league of one of the nation’s major sports.

Absent any evidence as to any alternative (subjective) intention on the part of the RFU and/or the Premiership clubs, the objectives of the Minimum Capacity Requirement thus appear to be:

(i) To ensure the health and safety of fans attending Premiership fixtures; and

(ii) To maintain and increase the general health and popularity of the sport.[9]

These would seem to be legitimate objectives.

So, is the Minimum Capacity Requirement inherent in the pursuit of those objectives?

The RFU would presumably say that it is, because they would consider it necessary and proportionate (i) to ensure clubs’ grounds fall “under the remit” of the Sports Grounds Safety Authority (the “SGSA”) and the Green Guide (guidance produced by the SGSA on spectator safety at sports grounds), which are necessary to ensure the health and safety of fans, and (ii) for a team in English rugby’s top league to have suitably large stadia to ensure a good fan experience, to ensure sufficient revenue from ticket sales and to create a good product for broadcast and other media.

However, it is not clear that such reasoning holds up to scrutiny.

Health and Safety

First, as regards the health and safety objective, contrary to the RFU’s suggestion, the grounds of Premiership clubs do not fall under the regulatory or supervisory remit of the SGSA (aside from those grounds which are also EFL or Premier League football club grounds – i.e. Bristol Bears, London Irish and Wasps), regardless of their size.

Section 1(1) of the Safety of Sports Grounds Act 1975 (the “1975 Act”) provides that:

The Secretary of State may by order designate as a sports ground requiring a certificate under this Act (in this Act referred to as a “safety certificate”) any sports ground which in his opinion has accommodation for more than 10,000 spectators.

Therefore, any sports ground, with capacity in excess of 10,000, will need to obtain a safety certificate from the relevant local authority, if so designated by the Secretary of State. The safety certificate will set the permitted capacity for the sports ground together with the detailed terms and conditions with which the ground management must comply in order to operate it.[10] The threshold is reduced to 5,000 for sports grounds occupied by EFL or Premier League football clubs.[11]

The Football Spectators Act 1989 (the “1989 Act”) creates a licensing scheme for stadia hosting designated football matches (currently, Premier League, EFL and international matches) and, following the introduction of the Sports Grounds Safety Authority Act 2011 (the “2011 Act”), responsibility for administering this scheme lies with the SGSA. To obtain a license, the stadia must comply with certain safety criteria.

Further, under section 13 of the 1989 Act, the SGSA has responsibility for reviewing how local authorities discharge their functions under the 1975 Act (i.e. in relation to safety certificates for large stadia). However, this responsibility extends only to grounds at which designated football matches are played.[12] The SGSA has no regulatory or supervisory responsibility for grounds at which (only) rugby matches are played, regardless of their capacity.

The SGSA can provide advice relating to safety at sports grounds in England or Wales to any local authority, body or person – regardless of the ground’s capacity.[13] Likewise, the Green Guide applies to sports ground safety generally, regardless of capacity. Therefore, neither the SGSA’s remit nor its Green Guide can be used as justifications for the Minimum Capacity Requirement.

Nonetheless, the RFU might submit that the Minimum Capacity Requirement is necessary to ensure that all Premiership grounds are required to obtain a safety certificate from the relevant local authority. However, Premiership club, Saracens’ ground has not yet been designated by the Secretary of State as requiring such certification.[14] So, how necessary is it?

Further, it is not clear why such a requirement should be necessary. If the government does not consider it necessary for smaller grounds to be so regulated, it is not clear why the RFU should consider it necessary for clubs to have larger grounds, in order to become eligible for greater regulation.[15] Indeed, the RFU has previously been comfortable staging England U20 and England Women international fixtures at Doncaster’s ground, whilst both grounds (obviously) host Championship matches regularly, and Ealing have hosted the Premier 15s final – all without incident. Why is the Premiership different?

In any event, under Part III of the Fire Safety and Safety of Places of Sport Act 1987, any stand providing covered accommodation for 500 or more spectators at a sports ground is required to have a safety certificate issued by the local authority (equivalent to those required for large grounds under the 1975 Act, albeit only in respect of each covered stand). Therefore, Ealing and Doncaster’s grounds will have local authority certification for significant parts of their grounds. Notably, Premiership club, Bath’s large, uncovered stand will not require such certification.

In this author’s view, the apparent health and safety justification simply does not stand up to scrutiny. The Minimum Capacity Requirement cannot be inherent or necessary in pursuit of this objective.

Health and Popularity of the Sport

As regards the second apparent justification of maintaining and increasing the health and popularity of the sport, again this author considers the Minimum Capacity Requirement to be unnecessary and, thus, unsustainable.

According to publicly available data, six of the 13 Premiership clubs have averaged attendances below 10,000 so far this season.[16] Clearly, Covid-19 will have played its part in those figures but, over recent seasons, three to four of the previously-12 Premiership clubs averaged below 10,000 (i.e. between a quarter and a third of the league).[17] Why, then, is it necessary to have a ground capable of accommodating 10,001 fans?

As noted above, the RFU would rely on the need to ensure a good fan experience, match-day ticket revenues and quality of the product for broadcast. Yet, wouldn’t fans rather be in a sold-out smaller ground than a partially empty albeit larger one? And wouldn’t that look better for TV, too? Half-empty stadia never look great and offer an underwhelming fan experience. In any event, viewing figures for the Premiership have recently risen, notwithstanding many matches being played without any fans because of Covid-19 – and people aren’t tuning in just to look at the stadia.

Some spectators are probably necessary for Premiership clubs (how many people would want to attend or watch on TV a game played in an otherwise empty field?), but the need for minimum standards is not – a Premiership club is unlikely to have got where it is, or be able to survive in the long-term, without a reasonable number of spectators coming along.

Further, whilst this author is in favour of requiring minimum investment on player salaries to promote competitive balance,[18] it is not clear why there must be a requirement on clubs to be able generate a certain amount of revenue from match-day ticketing (which, in any event, is also based on ticket pricing), as opposed to other revenue streams, merely to enter the league.

The threshold of 10,001 appears, in this respect, to be wholly arbitrary and, thus, unnecessary.

Ultimately, finances are part of the issue. The Minimum Capacity Requirement demands that clubs invest in larger grounds (or enter likely-expensive ground-share arrangements), before they know whether they will be promoted to the Premiership. Yet, the Championship is not a commercially suitable environment in which to finance such development, primarily owing to the lack of funding (which was cut by the RFU in early 2020, pre-pandemic) and the shareholder system operated by the Premiership clubs (which has always meant that relegated Premiership clubs were all but guaranteed immediate promotion, and that Championship clubs cannot benefit from the same revenues without first buying in).[19] The lack of a broadcast deal is also significant, whilst the economic effects of Covid-19 have also been significant for Championship clubs.

Against this background, who would be willing to commit to building a larger ground, in the hope of being promoted, given the uncertainties of sport? It would arguably be commercially irresponsible.[20] Ground-share arrangements may be slightly less galling but often entail moving away a traditional fan-base and are often commercially problematic.

In these circumstances, the severe anti-competitive effects of the Minimum Capacity Requirement are obvious and are, in this author’s view, wholly disproportionate to any benefit it might bring to the health and popularity of the sport. In addition to being unnecessary for the pursuit of this objective, the Minimum Capacity Requirement threatens to compromise both the financial stability of Championship clubs seeking promotion and the principle of sporting merit, to the detriment of the sport.

4.3 Conclusion

Therefore, in this author’s opinion, the Minimum Capacity Requirement is likely to breach competition law, as the restriction of competition and/or abuse of dominant position it entails cannot be justified by reference to a legitimate objective.

Were Ealing and/or Doncaster to establish as much on appeal, the Minimum Capacity Requirement would be deemed void, and could therefore not be applied to deny them promotion to the Premiership.

The rugby (and competition law) fandom will eagerly await the outcome of the case.

Article by Ben Cisneros. Ben is a Trainee Solicitor at Morgan Sports Law, though this article reflects only the author’s personal views. Please email ben.cisneros@morgansl.com for any legal or media enquiries.

References

[1] See Regulation 3.2(b) of the Premiership Regulations 2021-22

[2] See Regulation 1.1 of the Premiership Regulations 2021-22

[3] See Regulation 3.2 of the Premiership Regulations 2021-22

[4] See, for example, Case C-309/99 Wouters [2002] ECR I-1577 and Case C-519/04 P Meca-Medina and Majcen [2006] ECR I-6991. This line of authority was endorsed by the decision of the independent disciplinary panel in PRL v. Saracens (2019) and Case T-93/18 International Skating Union (2020).

[5] The judgment of the independent appeal panel is not publicly available. However, it is summarized and analysed extensively in Williamson, B., Premiership Rugby Union: Through the Antitrust Looking Glass (2015) 11(1) Competition Law Review 41, at 46

[6] Ibid.

[7] See Section 2 of the Competition Act 1998

[8] See Section 18 of the Competition Act 1998

[9] As noted above, this was the legitimate objective articulated by the RFU in the London Welsh case.

[10] See the SGSA’s guidance here

[11] See the Safety of Sports Grounds (Accommodation of Spectators) Order 1996

[12] See section 13(1) of the 1989 Act and the SGSA’s website.

[13] See section 3 of the 2011 Act and the SGSA’s website.

[14] See the Safety of Sports Grounds (Designation) Order 2015/661. This is likely owing to the fact that a significant part of the capacity at Saracens’ ground is made up of temporary stands.

[15] Insurance conditions could have something to do with it, though it would be surprising if these imposed obligations beyond those required by law.

[16] See here

[17] See 2019/20, 2018/19, 2017/18, and 2016/17

[18] See here

[19] As to the latter, see Williamson, B., Premiership Rugby Union: Through the Antitrust Looking Glass (2015) 11(1) Competition Law Review 41, at 52-60

[20] Notably, the Stadium for Cornwall project (to create a ground at which, inter alia, Championship rugby club, Cornish Pirates could play) has been ongoing for more than a decade and has relied on local and national government support to get off the ground. However, work is yet to start in earnest, owing to funding issues.