In recent years, the "Sports Clubs and Sports Federations Law Proposal" was adopted on 30 March 2022 upon the closure of sports clubs due to the debts of sports clubs in the National Education, Culture, Youth and Sports Commission of the Turkish Grand National Assembly. The law proposal was adopted in the General Assembly of the Turkish Grand National Assembly in a short period of time and published in the Official Gazette dated 26 April 2022 and entered into force. The aim of the Sports Law, which consists of 60 articles in total, is to make sports clubs and sports federations in accordance with the requirements and needs of the age, and aims to the sporting achievements of the Turkish sports clubs. Relatedly, under the Article 1 of the Law and “Objective and Scope”, the purpose of the law is stated as follows: “to regulate the establishment, organs, upper institutions, income and expenses, budget and expenditure principles, duties, powers and responsibilities, inspections, forms of the Sports Clubs, Sports Joint Stock Companies and Sports Federations and conditions of all kinds of assistance to them and other issues related to them and to regulate the principles”.
In the law, some issues such as "Sports Clubs and Spor Joint Stock Companies", the organizational structure of these organizations, their financial obligations, Sports Federations, penal provisions are regulated. According to Article 60 of the Law, titled “Execution”, it is stated that the provisions of this regulation will be executed by the President. The regulations aim, on the one hand, to record the entire sector financially, and on the other hand, to implement sports clubs and federations operating with transparency, democracy and balanced budget understanding. In addition, it should be noted that this regulation covers not only football, but also all sports branches from basketball to handball.
When the introduced regulations are examined closely, it is stated that this law will not be applied for sports federations which have their own regulations and laws. It has been also stated that all publicly traded sports joint-stock companies, including sports joint-stock companies whose shares are traded on the stock exchange, are subject to the capital market legislation, and that the provisions introduced by this regulation for sports joint-stock companies will apply as long as they do not differ from the regulations of the capital market legislation for publicly-held companies. In case of different provisions on the same subject are available, it has been determined that the provisions of the capital market legislation will be applied to publicly traded sports joint stock companies primarily.
According to Article 3, titled "Establishment and Acquisition of Legal Entity", sports clubs can be established by at least seven persons, regardless of real or legal, for the purpose of participating in sports activities. In order to establish a sports club, these persons must apply to the Ministry of Youth and Sports, together with the notification of establishment, the statute and other necessary documents. The Ministry examines the accuracy of the documents within sixty days. In case of deficiencies, the founders are requested to correct the deficiencies. If the deficiency is not corrected within sixty days, the application will be rejected by the ministry. If the Ministry does not find a defect as a result of the examination, the sports club will be registered by the ministry in the sports clubs registry adn the legal entity is acquired through this registration process. In addition, the minimum elements that should be included in the bylaws of the sports club are determined. These are the name of the sports club, sources of income, membership conditions and organs, and the temporary board of directors. The notice of establishment, the conditions of registration and the content of the statute, the necessary documents will be determined by the regulation to be issued by the Ministry. Moreover, the termination, banning and cancellation of the club are regulated in Article 9.
The audit and declaration procedure is the same in both sports clubs, sports joint stock companies and supreme boards. According to Article 13; Sports clubs, sports joint-stock companies and supreme boards; All kinds of administrative and financial transactions and activities, especially whether they operate in line with the purposes set forth in the relevant legislation, bylaws and articles of association, and whether they keep their books and records in accordance with the legislation, will be audited by the Ministry. The Ministry can also carry out its audit by having it audited by an independent audit firm.
Spor Joint Stock Companies are arranged between 14-17. articles. Article 14 regulates the acquisition and loss of the qualification of a sports joint stock company. According to this; Joint stock companies established in accordance with the Commercial Code and gaining legal personality will become sports joint stock companies upon their registration by the Ministry. The registration application of these companies will be decided by the Ministry within thirty days. In case of any violation or deficiency in the application, it is requested that this issue be corrected within thirty days. If this contradiction or deficiency is not corrected within this period, the application will be rejected. If there is no contradiction or defect in the application, or if this contradiction or deficiency is corrected, the company will be registered in the registry of the sports joint stock company. On the other hand, according to the third paragraph, sports federations may impose an obligation to be in the status of a sports joint stock company in order to take part in certain leagues, and a minimum capital requirement for these companies, whose paid-in capital is not less than one million Turkish liras.
When the financial provisions are examined, financial principles and regulations for sports federations, sports clubs and sports joint stock companies are given. In addition, income and expense items have been counted one by one, and in parallel, sports clubs have to include issues related to the implementation of the budget in their by-laws and in the articles of association of sports joint-stock companies. The financial principles introduced by the law are briefly; Transparency and reliability, Timing, Balanced budget, Encouragement of sportive investments can be counted.
Sports federations are arranged between 26-46. articles. Issues such as the establishment and organizational structure of sports federations, duties and powers are covered. In cases where there is no provision in this law regarding sports federations, the provisions of the founding laws of sports federations, Youth and Sports Services Law No. 3289 dated 21/5/1986, Law No. 4721 and Law No. 5253 shall apply. Sports federations will be established by law or Presidential decree to carry out activities related to sports and will gain legal personality with the publication of the Presidential decree in the Official Gazette. The main statutes of the newly established sports federations will be prepared by the Ministry, the sports branches will be determined by the Ministry and they will be connected to the sports federations in technical and administrative terms. General assemblies of sports federations will be held in Ankara and observers will be appointed by the Ministry.
Most of the penal provisions regulate the violation of the financial regulations. Accordingly, payments and collections to be made on behalf of or on behalf of sports clubs and sports joint-stock companies and even sports federations will be made through banks and financial institutions or Postal and Telegraph Organization Inc. within the scope of Law No. 5411. Otherwise, the head of the sports club and sports joint stock company, the members of the board of directors and the managers will be punished with a judicial fine from one hundred to five hundred days. Another example is the persons who use the immovables allocated by the Ministry and other public institutions to the immovables allocated by the Ministry and the supports provided, including the sports federations with the founding law, for purposes other than allocation or support, shall be sentenced to imprisonment from one year to five years. On the other hand, those who knowingly misrepresent the declarations to be submitted to the Ministry's examination will be punished with a judicial fine of not less than a hundred days.
Finally, some limitations were introduced regarding the manager's wages, and it was stated that the limit would be determined according to the gross annual income of the football player. It has been made mandatory for the management contract to be made in the form of a notary arrangement and these contracts are also subject to the supervision of the Ministry. As from the effective date of the Law, Sports clubs and their higher organizations must bring their statutes, administrative and financial structures into compliance with the provisions specified in the regulation within one year at the latest, and joint stock companies established before the effective date of the law and operating in the field of sports are obliged to comply with the Law's effective date, at the latest. It is obligatory to become a sports joint stock company within one year by fulfilling the obligations stipulated for them in the Law. Those who cannot ensure their eligibility within this period may be given an additional period of up to six months. Again, affiliated and independent sports federations established before the effective date of the law will be considered as sports federations established in accordance with this regulation and those who were the head of the federation on the effective date of the law and those who were president of the federation before the effective date of the Law; regardless of their terms of office, they will be able to serve for a maximum of three more terms.
Unal&Partners Legal Team
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