Discovery rights and no‑poach effects in football - Lessons from EU competition law

Casemiro^[1] reportedly faced a hurdle in finalising his now-complete transfer to Inter Miami because LA Galaxy held his ‘discovery rights’ [2]. Under Major League Soccer (MLS) rules, clubs can register up to five players not under contract with the league on a discovery list, giving them the exclusive right to negotiate with those players and requiring rival MLS clubs to acquire those rights if they wish to sign them^[3].

This mechanism, little‑known in Europe, raises interesting questions from the perspective of competition law and economics, notably around whether it may restrict competition for players’ acquisition and could be viewed as having some similarities to no‑poach‑type arrangements.^[4]

Although discovery rights are a uniquely American mechanism operating within MLS, recent CJEU case law provides a useful framework for assessing their economic effects. While the European cases concern different football regulations, they raise similar questions about the potential anticompetitive effects of rules that influence player recruitment, mobility and bargaining conditions, as well as the circumstances in which restrictions on competition for players may be justified by broader objectives, such as competitive balance or the efficient organisation of competitions.

This article therefore approaches discovery rights primarily through an economic lens but also a legal lens, examining how rules governing player acquisition affect competition between clubs, players' bargaining power and market outcomes. This perspective helps clarify both the potential anticompetitive effects of discovery rights and whether any such effects may be justified by legitimate sporting objectives.

These questions take on particular significance in light of the Court of Justice of the European Union (CJEU)’s judgments in Diarra^[5], Tondela^[6], and RRC Sports^[7]. Together, these decisions provide a useful framework for assessing when football regulations affecting player recruitment and related markets may restrict competition and whether such restrictions may be justified.

This article looks at:

• What are MLS discovery rights?
• Parallel with recent EU cases
  • Diarra
  • RRC Sports
  • Tondela
• Economic effects and justification
  • Do discovery rights have appreciable no‑poach‑like effects on players’ wages?
  • Is the discovery rights system necessary and proportionate to the organisation of MLS and to promote competition from weaker teams?
  • Do discovery rights have pro-competitive effects that offset anticompetitive restrictions? Should these efficiencies arise in the same market as the restrictions?
• Conclusion