Competition Law and Sport in South Africa
By Razia Mahomed, School of Law, UNISA, Pretoria, South Africa
1. Introduction
Sport is no longer merely a cultural spectacle. Globally, it has become a powerful commercial industry, integrated into financial markets and attracting significant investment. The fact that elite clubs, such as Manchester United and Real Madrid, are listed on major stock exchanges illustrates the economic weight of modern sport.
This trend is mirrored in South Africa. Although sport is not formally classified as an economic sector in national accounts, the Department of Sport and Recreation estimated that sport contributed approximately 2.1% of GDP in 2009, amounting to about R41 billion (around €2.07 billion). Football, rugby and cricket have become major commercial enterprises driven by broadcasting rights, merchandising, sponsorships, and professional league structures.
As the South African sports industry expands and commercialises, questions arise regarding the application of the Competition Act 89 of 1998 (the Competition Act). Whilst competition law has not yet been extensively applied to sports-related disputes, the legal framework is broad enough to regulate anti-competitive conduct, assess commercial arrangements, and advance public interest goals within the sector. The international trend, most notably in the European Union (EU), shows that the role of competition law in sport is growing and unavoidable.
2. International Developments
A key turning point in global sports regulation came in the EU with the European Court of Justice decision in Meca-Medina and Majcen v Commission of the European Communities [2006] ECR 1-16991, which clarified that sporting rules are not automatically exempt from competition law. The Court held that even rules framed as “sporting” must be proportionate and must not restrict competition beyond what is necessary for the proper functioning of the sport.
Since Meca-Medina, competition authorities across Europe have intervened in matters such as:
- joint selling of media and broadcasting rights;
- ticketing arrangements for the FIFA World Cup and Olympic Games;
- transfer and eligibility rules;
- Financial Fair Play regulations.
These interventions reflect two factors that resonate equally in South Africa:
- the increasing commercialisation of sport; and
- sport’s significant economic, social, and cultural impact.
Although South Africa has yet to develop sport-specific competition jurisprudence, the logic of Meca-Medina, that commercial conduct cannot hide behind the cloak of sporting autonomy, provides a persuasive framework for analysing domestic disputes.
3. Competition Law and the South African Sporting Landscape
The Competition Act applies to any “firm” engaging in economic activity. Sports organisations, broadcasters, sponsors, and commercial rights managers easily fall within this definition when they sell rights, negotiate contracts, or regulate access to revenue-generating activities.
Despite the limited number of sport-specific cases, the Act provides a solid foundation for regulating commercial behaviour in South African sport across several key areas.
4. Key Areas of Application
4.1 Exclusionary Conduct Between Clubs and Leagues
Clubs within a league are competitors. Any rule or governance decision that unfairly limits a club’s ability to compete, particularly where it lacks a legitimate sporting rationale, may constitute an exclusionary act under the Act. Examples include:
- discriminatory licensing or membership decisions;
- unfair restrictions on participation;
- unequal access to commercial platforms, fixtures or facilities.
Drawing from Meca-Medina, the test is whether the rule is proportionate and necessary for sporting integrity, or whether it amounts to unjustified market exclusion.
4.2 Commercialisation
Commercial arrangements lie at the centre of modern sport and pose several competition risks:
- exclusive broadcasting contracts may foreclose markets or entrench dominance;
- joint selling of media rights, although efficient, may limit competition if improperly structured;
- ticketing arrangements can restrict consumer choice or create resale monopolies;
- vertical agreements in merchandising and sponsorship may suppress market entry.
In South Africa, entities such as SuperSport hold substantial market power in sports broadcasting. The Competition Commission may intervene if such dominance results in restricted access, inflated prices, or unfair competitive outcomes.
4.3 Abuse of Dominance by Sports Governing Bodies
National sporting federations and governing bodies often hold monopoly control over their codes. They may be dominant firms for competition law purposes. Potential abuses include:
- unjustifiable exclusion of rival leagues or clubs;
- eligibility rules with disproportionate commercial consequences;
- refusal to provide access to essential facilities or competitions.
Whilst they must regulate their sports, they may not wield regulatory authority to distort downstream commercial markets.
5. Public Interest and Transformation
Unlike many jurisdictions, South African competition law explicitly incorporates public interest objectives, including:
- promoting economic transformation;
- facilitating participation by historically disadvantaged persons;
- supporting small and medium enterprises;
- advancing equitable community development.
A recent decision by the Competition Tribunal demonstrates how transformative this mandate can be. In the settlement between the Competition Commission and the Willowton Group, following allegations of price fixing and market division in the edible oils sector, the Tribunal confirmed a consent agreement combining financial penalties with significant community-based obligations.
Although Willowton paid a modest administrative penalty of R1 million (around €50,503), the settlement required R100 million (around €5.05 million) in public-interest commitments, including:
- an education trust providing R20 million (€1.01 million in bursaries (with at least 60% allocated to female students from historically disadvantaged backgrounds);
- investment in community development projects in education, healthcare and infrastructure;
- extensive support for SMEs, including funding, training and mentorship for businesses owned by historically disadvantaged individuals.
Legal experts described the case as a precedent-setting example of how competition enforcement can be used to promote equity and inclusivity, noting that settlements can serve as tools for broader socio-economic upliftment.
This approach has direct relevance to the sports sector. Should anti-competitive conduct arise in sport, such as exclusionary league structures, unfair distribution of broadcasting revenue, or restrictive access to facilities, the Commission could adopt remedies that not only correct market failures but also:
- enhance access for historically disadvantaged athletes or clubs;
- require development pathways and grassroots investment;
- ensure that commercial benefits promote inclusive growth.
Thus, competition law becomes not only a tool for market fairness, but also a mechanism to reshape the socio-economic landscape of South African sport.
6. Challenges and Considerations
6.1 Limited Jurisprudence
South Africa lacks extensive competition cases involving sport. As a result, regulators may increasingly look to the EU and comparative jurisprudence when assessing domestic issues.
6.2 Jurisdictional Conflicts with International Sporting Bodies
National federations must comply with rules issued by global bodies such as FIFA, World Athletics and World Rugby. Conflicts may arise where international regulations restrict market entry or impose commercial constraints incompatible with the Competition Act.
6.3 Balancing Sporting Autonomy and Regulatory Intervention
Competition authorities must distinguish between:
- rules essential to sporting integrity (for example), eligibility, anti-doping), and
- rules with unnecessary, unjustifiable anti-competitive effects.
Striking this balance is central to ensuring that regulation protects both the spirit of sport and the fairness of markets.
7. Conclusions
The commercialisation of sport, both globally and in South Africa, is reshaping how sports organisations operate and compete.
As sport becomes a multi-billion-rand industry, the application of competition law becomes unavoidable. The Competition Act provides a robust framework for addressing exclusionary conduct, scrutinising commercial practices, preventing abuses of dominance, and uniquely advancing public interest objectives.
International developments, such as Meca-Medina, offer persuasive guidance on how to regulate the intersection of sport and economic activity. Domestically, cases, like the Willowton settlement, illustrate how competition law can be leveraged to advance socio-economic transformation.
As South African sport continues to commercialise, competition law will play an increasingly important role in shaping governance, market conduct, and equitable development.
The intersection of law, economics, and sport is, therefore, an evolving landscape: one that demands ongoing legal, academic, and policy engagement.
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