Court of Justice of the EU rules on (un)fairness of profit-sharing clause in minor athlete’s contract
EU Law analysis: In a landmark ruling, the Court of Justice recently affirmed the applicability of EU consumer protection law to contracts involving minors in the sports industry. The court found that a contractual term obliging a young athlete to transfer part of his income to a sports talent agency if he becomes a professional athlete may be considered unfair under Directive 93/13/EEC, the EU Unfair Terms in Consumer Contracts Directive (EU UTCCD), if the clause is not plain and intelligible as regards the financial consequences of the commitment. The Court of Justice remains true to its principles on consumer protection issues and emphasizes once again the transparency requirement. As promising talents are being recruited at ever earlier ages, the decision is likely to have significant implications for practitioners particularly in the sports sector but also beyond the industry. While the Court of Justice generally allows such contracts and finds that a disproportion between the provided service and the remuneration does not lead to unfairness per se, talent development professionals must ensure that sports agent agreements with minors are drafted in accordance with consumer protection standards and adequately reflect the long-term interests of the athletes. Written by Robert Briske, M.mel., partner at Osborne Clarke (Berlin, Germany) and Jonas Müter, LL.M. (EMLE), associate at Osborne Clarke (Hamburg, Germany).