Author: Abdullah Bozdaş
Introduction
The Sports Clubs and Sports Federations Law (“Sports Law”), published in the Official Gazette dated 26.04.2022 and numbered 31821, introduced detailed regulations on sports clubs, sports joint stock companies, and sports federations. The Sports Law, which entered into force on the date of publication, encourages the incorporation of sports clubs. This move has been expected for many years by the sports-loving public, and gives sports federations the authority to adopt the mandatory incorporation of sports clubs. The Sports Law is intended to solve the financial problems of football clubs and includes general regulations covering all areas of sports.
In this Newsletter, the regulations regarding the establishment, registration, capital, and shareholding structure of sports clubs and sports joint stock companies under the Sports Law will be examined.
A General Overview of the Sports Law
The most striking change brought about by the Sports Law concerns the structuring of sporting organizations. These organizations, which are currently structured as associations, will now be structured in the form of a new legal entity called a “sports club.” Although it is likely that Law of Associations No. 5253 will be applied to specific articles of the Sports Law regarding sports clubs, this is actually a new kind of structure. The main purpose behind the creation of this new legal entity is to pave the way for structuring sports clubs as joint stock companies, as this will ease difficulties related to investment and financing and help them to deal with their financial problems.[1] It is also significant that this legislation gives enforcement authority to the Ministry of Youth and Sports, unlike in existing practice.
Establishment and Registration of Sports Clubs
Before the Sports Law entered into force, amateur sports organizations could be structured as associations, while only professional football clubs could be established as joint stock companies.[2] However, the most common form of organization for all sports organizations, including football clubs, was that of the association. This resulted in a structure that was far from flexible and effective, and which was not facilitating investment and financing. The legislature, correctly identifying this disadvantage, created the sports club as a new legal entity. When both article 3 of the Sports Law regarding the establishment of sports clubs and the general preamble of the Law are read together, it is clear that the legislature envisaged the organization of sports clubs as a different kind of legal entity than an association. As a matter of fact, instead of the free establishment form, which is the way that associations acquire legal personality, the legislation provides for the creation of legal personality by registration for sports clubs which are joint stock companies. In addition, the fact that this application must be made to the Ministry of Youth and Sports instead of the Ministry of Interior is another significant difference between the new law and the old one.
