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FNE files a complaint against the ANFP before the TDLC requesting the termination of an entry fee to play in the First Division B of Chilean professional football

02 / 03 / 2018

The National Economic Prosecutor’s Office (FNE) filed a complaint against the National Professional Football Association (ANFP) before the Competition Court (TDLC), requesting the termination of the entry fee that professional football teams in Second Division are required to pay when promoted to “First Division B”. The aforementioned fee amounted to UF 50,000 (over US$ 2 million) between 2011 and 2017, and now amounts to UF 24,000 (over US$ 1 million).

The FNE claims the ANFP’s conduct “prevents, restricts and thwarts competition in the market, or at least, tends to produce such effects, constituting an artificial barrier to the entry of new competitors, seriously affecting the competitive capacity clubs entering the market, thereby reducing the competitive intensity therein and, ultimately, the quality of the product offered to consumers”.

The FNE’s investigation started on December 15, 2016, after four reports were filed regarding to the incorporation fee charged to Deportes Valdivia following its promotion to First Division B that same year.

Considering the Second Division’s clubs incomes and assets, the FNE determined that the fee constitutes a real barrier to entry for to the market of sporting events generated based on the “First Division B” tournament, taking into account that the entities have very limited access to credit.  Consequently, it is highly likely that Second Division clubs may not be able to finance the incorporation fee, potentially preventing these entities from participating in the First Division B tournament, as it would correspond according to their sporting merits.

Furthermore, the FNE contends that the requirement to pay the entry fee affects the competitive capacity of the club promoted to “First Division B”. Indeed, as established during the inquest, the obligation to pay the entry fee hinders the club’s future income during a considerable timeframe, preventing the institution from investing in resources relevant for their sporting performance, under conditions similar to the rest of the clubs in the same category. This economic burden causes the club to neglect key issues such as the salaries of its players and coaching staff, infrastructure, improved lodging and travel conditions and its own youth teams.

In light of the above, the FNE has requested the TDLC to order the termination of the accused conduct imposing the ANFP a fine of 5,000 U.T.A., equivalent to approximately US$ 4.7 million.