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2.        ACKNOWLEDGMENTS							5                                            For further information about Sandlanders, please

3.        ABOUT 									5                                                   Paul Jones
                                                                             Sandlanders Football

4.        PART I - CLUB STRUCTURES 						                               8    1st Floor CAN Mezzanine
                                                                             49-51 East Road
                                                                             London, N1 6AH
5.        PART II - CLUB LICENSING 						                               14

6.        PART III - SD CASE STUDY: CLUB LICENSING IN GERMAN FOOTBALL   18   Facebook: facebook/
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                                                                             SUPPORTERS DIRECT
            7.1      EGYPT 								24
                                                                             For further information about Supporters Direct, please
            7.2      NIGERIA							28
                                                                             Antonia Hagemann
                                                                             Head of Supporters Direct Europe
            7.3      KENYA 								32                                        1st Floor CAN Mezzanine
                                                                             49-51 East Road
                                                                             London, N1 6AH
            7.4      SOUTH AFRICA							36                         

                                                                             James Mathie
8.        PART V - CONCLUSIONS AND RECOMMENDATIONS			40                      SD Club Development Manager
                                                                             1st Floor CAN Mezzanine
                                                                             49-51 East Road
9.        REFERENCES								42                                               London, N1 6AH

SANDLANDERS & SUPPORTERS DIRECT                                                                                       SANDLANDERS & SUPPORTERS DIRECT ©
4                                                                                                                                                                                                                                                                                             5

                                                                                                                                                                                             “This report will provide an insight
                                                                                                                                                                                             into how African football clubs are
Foreword - Linking Club Structures and Licensing                                                                                                                                             currently organised.”

                                                                                                                                              are often asked but the answers, despite                                                       ABOUT SANDLANDERS
                                                                                                                                                                                              NOTE ON METHODOLOGY
                                                                                                                                              being crucial to understanding how
                                                                                                                                                                                                                                             Sandlanders       works    with    African
                                                                                                                                              African football operates, are difficult        The four countries featured as case
                                                                                                                                                                                                                                             football clubs, supporters’ groups
                                                                                                                                              to find. We have therefore provided an          studies represent a geographical spread
                                                                                                                                                                                                                                             and associations. We focus on the
                                                                                                                                              overview of existing ownership structures       (respresenting the largest economy in
                                                                                                                                                                                                                                             development of sustainable clubs,
                                                                                                                                              across the continent with some analysis         each of the four main regions of Africa)
                                                                                                                                                                                                                                             league systems and infrastructure
                                                                                                                                              of the merits of the respective structures.     and a compromise between the goals of
                                                                                                                                                                                                                                             and promote democratic community
                                                                                                                                              This overview is supported by a more            the project and the available resources.
                                                                                                                                                                                                                                             ownership, transparency and good
                                                                                                                                              detailed review of the markets in four key      Whilst there has been some existing
                                                                                                                                                                                                                                             governance in the administration of
                                                                                                                                              jurisdictions - Egypt, Kenya, South Africa      work on the economics and structures of
                                                                                                                                                                                                                                             sports in Africa. Our assistance for clubs
                                                                                                                                              and Nigeria. We conclude the report with        sports clubs in Africa, there is no study
                                                                                                                                                                                                                                             and associations includes advising on
                                                                                                                                              a summary of conclusions and recom-             such as this already in existence.
                                                                                                                                                                                                                                             corporate structures and governance,
                                                                                                                                              mendations for future practice.
                                                                                                                                                                                              Given the diversity of club structures         league systems, licensing issues and
                                                                                                                                              Based on our experience of involving            and legal systems across the continent,        sports infrastructure projects.
                                                                                                                                              communities in the running of football          the report is only able to give a brief
                                                                                                                                                                                                                                             As well as developing our own network of
                                                                                                                                              clubs, this report will also show, through a    overview of each jurisdiction and
                                                                                                                                                                                                                                             community-owned clubs and supporters’
                                                                                                                                              combination of analysis and highlighting        relevant club structure. Ownership and
                                                                                                                                                                                                                                             groups (who are also our shareholders)
                                                                                                                                              of best practice, the strength of the links     financial details reported have largely
                                                                                                                                                                                                                                             competing in domestic leagues in Ghana,
                                                                                                                                              between community ownership and                 been obtained from public sources and
                                                                                                                                                                                                                                             Liberia, Sierra Leone, Nigeria, Kenya,
                                                                                                                                              community involvement in decision-mak-          we welcome comments and corrections
                                                                                                                                                                                                                                             Uganda, Zambia and Zanzibar, we work
                                                                                                                                              ing at sports clubs and long-term financial     from all stakeholders that would allow us
                                                                                                                                                                                                                                             on a range of other projects. Our core
                                                                                                                                              sustainability and good governance. We          to develop this research further in future.”
                                                                                                                                                                                                                                             areas of focus are club development;
“We believe that the                                                                                                                          believe that the sustainable success of
                                                   This is the first annual report to be       Regulations across CAF’s 562 member                                                                                                           policy, research and advisory and
                                                                                                                                              sports clubs flows from the right choice
sustainable success of sports                      produced by Sandlanders and our             associations (“MAs”). The Regulations                                                                                                         project management. In conjunction
                                                                                                                                              of structure, whilst a comprehensive
                                                   partners at Supporters Direct focusing on   are based almost entirely on those                                                             ACKNOWLEDGMENTS                                with Architecture for Humanity, we have
clubs flows from the right                                                                                                                    club licensing system - on a national and
                                                   the business of football in Africa. Based   established by FIFA in 2008 and establish                                                                                                     developed designs for SoccerHub - an
                                                                                                                                              continental level - creates a fair platform     This report could not have been prepared
choice of structure.”                              on our experience working with clubs,       sporting,    infrastructure,   personnel,                                                                                                     integrated sports and community facility
                                                                                                                                              for competition and rewards well-run            without the valuable contributions of
                                                   associations and supporters’ groups in      administrative, legal and financial criteria                                                                                                  specifically for use in Africa.
                                                                                                                                              clubs.                                          a variety of African football industry
                                                   nine African countries over the last five   to be met by clubs - all areas in much
                                                                                                                                                                                              stakeholders and experts including             In addition to market-specific knowledge
                                                   years, we have observed that weak           need of improvement across Africa.             Community ownership is already a big
                                                                                                                                                                                              fans, clubs, associations, journalists,        obtained from our clubs, through a
                                                   football club structures and an absence                                                    part of sporting culture in many parts
                                                                                                                                                                                              corporate sponsors and lawyers.                formal partnership agreement with
                                                   of effective licensing is at the core of    To aid understanding of the challenges         of Africa and clubs and supporters now
                                                                                                                                                                                                                                             Supporters Direct we are able to draw
                                                   many of the key issues affecting football   ahead, this report will provide an             need to take steps to ensure that this          In particular, we would like to thank
                                                                                                                                                                                                                                             on their experience of working in
                                                   on the continent.                           insight into how African football clubs        involvement translates into financial           Adam Moustafa and Ahmed Assem (of
                                                                                                                                                                                                                                             over 20 European countries assisting
                                                                                               are currently organised. In contrast to        sustainability and good governance              Egyptian football website,
                                                   While the adoption of the CAF1 Club                                                                                                                                                       local communities and clubs develop
                                                                                               football in Europe and elsewhere, there        which has to-date not always been               Nasr El Din Azzam (Sport Makers,
                                                   Licensing Regulations (the “Regulations”)                                                                                                                                                 democratic forms of governance.
                                                                                               is still a general lack of information         demonstrated.                                   Egypt); Oluwada Lotfi (Egypt), Claudia
                                                   in 2012 provides a foundation for change
                                                                                               relating to the administration of sports                                                       Ekai (Kenya), Omollo Arthur Omondi
                                                   in the African game, there remain                                                          Paul Jones, Director,
                                                                                               in Africa. Questions such as “Who owns                                                         (Kenya), Mdudzi Mdunge (South Africa),
                                                   challenges ahead to ensure effective                                                       Sandlanders Football
                                                                                               the club?” “Where does the money come                                                          Ayodeji Adegbenro (Nigeria) and Michael
                                                   monitoring and implementation of the
                                                                                               from?” and “Where does the money go?”                                                          Adebayo (Nigeria).

SANDLANDERS & SUPPORTERS DIRECT ©                                                                                                                                                                                                                            SANDLANDERS & SUPPORTERS DIRECT ©
FIRST AFRICA REPORT: CLUB STRUCTURES & LICENSING                                                                                                                                                                                                 FIRST AFRICA REPORT: CLUB STRUCTURES & LICENSING

                                                   ABOUT SUPPORTERS DIRECT

                                                   Supporters Direct (“SD”) is an organisation that assists democratic football
                                                   supporter organisations in achieving formal structured involvement in their clubs and
                                                   associations and developing supporter community ownership of football clubs. SD
                                                   also advises clubs on their ownership and governance structures, and works with
                                                   football associations, leagues, UEFA, and other European institutions. Through our
                                                   SD Club Development consultancy we have the expertise to assist clubs in a variety
                                                   of situations. In respect of club licensing and supporter involvement, our work over
                                                   more than a decade has given us a recognised expertise in how decision-making
                                                   structures in football can be improved to encourage long-term sustainability.

                                                   SD currently operate in over 20 European countries, having been set up as a UK-based
                                                   organisation in 2000. On the initiative of the UK Presidency of the European Union, in
                                                   2005, José Luis Arnaut was commissioned to undertake what became known as the
                                                   Independent European Sport Review. One of his recommendations directed at the
                                                   football authorities was for them: “to examine the feasibility of a European Supporters
                                                   Direct body”. UEFA liaised with SD in the UK to address this recommendation and
                                                   funded a 12-month feasibility study, managed by an independent researcher that
                                                   commenced in July 20073. The resulting paper illustrated a clear desire amongst
                                                   supporters and supporter owned clubs for similar services to those offered by SD in
                                                   the UK, but with elements tailored to their national contexts.

                                                   ABOUT COMMUNITY OWNERSHIP

                                                   ‘Community Club’ is a phrase that is becoming more and more popular when talking
                                                   about football and other sports globally. In Africa, the phrase is commonly used in a
                                                   variety of contexts when talking about a club with links to its community.

                                                   For the purpose of this report, we define ‘community ownership’ as meaning;

                                                   •        A minimum of 50% +1 of the voting rights of the club are controlled
                                                            collectively by a democratic entity which has an open and inclusive

                                                   •        ‘Democratic’ to mean the membership of the entity to work on a one member
                                                            one vote principle.

                                                   •        ‘Inclusive’ to mean that there are no substantial barriers to participate as a
                                                            voting member, with membership open to all that are sympathetic to the
                                                            aims of the club.

                                                   •        Any profits are reinvested back into the club as opposed to being distributed
                                                            to shareholders.

                                                   •        The club is committed to running as a sustainable business.
     A minimum of 50%
     +1 of the voting
     rights of the club are
     controlled collectively
     by a democratic entity
     which has an open and
     inclusive membership.

8                                                                                                                                                                                                                                                                                                    9

                                                                                                                                                                                               “a recurring problem in African
PART I: CLUB STRUCTURES                                                                                                                                                                        football is a lack of formality in
                                                                                                                                                                                               implementing these structures”

                                                                                                                                             register, statutes and annual accounts          form, list of authorized signatories and            between clubs and their supporters,
                                                                                                                                             of their club from the appropriate public       type of required signature)“. Article 12            limiting potential long-term engagement.
                                                                                                                                             registry but this is generally not the case     further requires that regardless of the
                                                                                                                                                                                                                                                 To provide a high-level example of the
                                                                                                                                             in Africa.                                      applicant’s legal structure, clubs shall
                                                                                                                                                                                                                                                 split of club structures across Africa, we
                                                                                                                                                                                             prepare independently audited accounts.
                                                                                                                                             This lack of formality is an issue FIFA                                                             have summarized below the structures of
                                                                                                                                             and subsequently CAF has sought                 The Regulations are considered in                   the 2014 CAF Champions League group
                                                                                                                                             to address through club licensing               greater detail in Part II of this report but,       phase participants which shows the
                                                                                                                                             regulations. One of the stated objectives       if implemented effectively, they will, at           dominance of community-owned clubs
                                                                                                                                             of CAF’s Club Licensing Regulations is          the top level at least, address one of              at the highest level of African football.
                                                                                                                                             to improve the economic and financial           the key issues impeding the commercial
                                                                                                                                                                                                                                                 TP Mazembe (World Club Cup finalists in
                                                                                                                                             capacity of clubs through “proper               development of African football - a lack of
                                                                                                                                                                                                                                                 2010) are the only fully private club in the
                                                                                                                                             corporate governance and control”.              corporate formality. Input received from
                                                                                                                                                                                                                                                 final eight clubs. Despite being privately-
                                                                                                                                             Article 11 of the Regulations requires          both sponsors and fans indicates that
                                                                                                                                                                                                                                                 owned, the club also exhibits some of
                                                                                                                                             as a Grade A (mandatory) requirement            (i) this lack of formality prevents clubs
                                                                                                                                                                                                                                                 the characteristics of community-owned
                                                                                                                                             that license applicants provide “a copy of      from accessing finance from commercial
                                                                                                                                                                                                                                                 clubs in terms of its commitment to
                                                                                                                                             valid statutes” together with “an extract       lenders and corporate sponsors alike;
                                                                                                                                                                                                                                                 developing infrastructure to benefit
                                                                                                                                             from a public register (trade register, etc.)   and (ii) the lack of transparency and
                                                                                                                                                                                                                                                 the community and build the profile of
                                                                                                                                             containing information on the license           accountability also puts a distance
                                                                                                                                                                                                                                                 Katanga Province4).
                                                                                                                                             applicant (such as name, address, legal

                                                                                                                                            TABLE 1 - 2014 CAF CHAMPIONS LEAGUE PARTICIPANTS - CLUB STRUCTURE OVERVIEW

                                                                                                                                                             CLUB                               COUNTRY                           STRUCTURE                     FOUNDED            FACEBOOK5
“if implemented                                    OVERVIEW                                    There are some variations in the above
effectively, the                                                                               forms from one jurisdiction to the next                  TP MAZEMBE                                                          Private limited liability             19397              111,552
                                                   Sports club structures evolve over                                                                                                  Democratic Republic of Congo
                                                                                               and increasingly, boundaries between                                                                                                company   6
regulations, at the top                            time and develop differently from one
                                                                                               the forms have become blurred,
                                                   jurisdiction to the next, influenced by                                                             AS VITA CLUB                                                           Community-owned                     19359              20,234
level at least, will address                                                                   particularly where community-owned                                                      Democratic Republic of Congo
                                                   country-specific economic, social and                                                                                                                                       multi-sport club   8
                                                                                               clubs have become subject to state or
one of the key issues                              political factors.                                                                             AL-HILAL OMDURMAN10                                                        Community-owned11                     1930             277,544
                                                                                               private influence.                                                                                 Sudan
impeding the commercial                            The ownership of sports clubs in Africa
                                                                                               Common to each of the forms, a                  ZAMALEK SPORTING CLUB                                                          Community-owned                      1911            2,744,504
                                                   can broadly be split into the following
                                                                                               recurring problem in African football is a                                                         Egpyt
development in African                             three forms:                                                                                                                                                                 multi-sport club
                                                                                               lack of formality in implementing these
football - a lack of                               1.   Community        ownership      (via   structures. Historically, many top tier          CLUB SPORTIF SFAXIEN12
                                                                                                                                                                                                                              Community-owned                      1928             234,935
                                                        a member-owned society or              clubs have not operated via a formally                                                                                          multi-sport club13
corporate formality.”
                                                        registered/unregistered association)   registered legal entity and where entities    ENTENTE SPORTIVE DE SETIF                                                       Community-owned14                     1958             103,846
                                                                                               are registered, there remains a lack
                                                   2.   State ownership (via a state-owned
                                                                                               of transparency and accountability to           ESPERANCE SPORTIVE DE                                                          Community-owned                      1919             226,047
                                                        authority/agency or company)                                                                                                             Tunisia
                                                                                               supporters in the way that the clubs                         TUNIS                                                              multi-sport club15
                                                   3.   Private ownership (via a private       are run. Across Europe for instance,
                                                                                                                                              AL-AHLY BENGHAZI SPORTS                                                        Community-owned16                     1947              29,493
                                                        limited company or unregistered        a supporter may obtain the ownership                                                               Libya
                                                                                                                                              CULTURAL AND SOCIAL CLUB                                                          multi-sport club

SANDLANDERS & SUPPORTERS DIRECT ©                                                                                                                                                                                                                                   SANDLANDERS & SUPPORTERS DIRECT ©
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                                                                                                                                               COMMUNITY OWNERSHIP ACROSS AFRICA -
                                                                                                                                               BRINGING COLOUR TO THE BEAUTIFUL GAME
                                                   1. COMMUNITY OWNERSHIP

                                                   The establishment of sports clubs as community or member owned associations or                                                                                                                          Al Ahly
                                                                                                                                                                  Entente Sportive de Sétif
                                                   societies has deep roots in various parts of Africa.                                                                                       Club Sportif Sfaxien                                         Zamalek
                                                                                                                                                                  JS Kabylie
                                                                                                                                                                                              Espérance Sportive de Tunis                                  Smouha
                                                   In North Africa in particular, many of the region’s most successful clubs are
                                                                                                                                                                                              ES Sahel                                                     Al Masry
                                                   established as multi-sports associations based on the same model used throughout
                                                                                                                                           Raja Casablanca                                                                                                 Ismaily
                                                   German football (where all clubs were founded as members’ associations) or at the                                                                      Al-Ahly Benghazi Sports
                                                                                                                                                                                                                                                           Ittihad of Alexandria
                                                   Spanish socio-owned clubs such as Real Madrid and Barcelona.                                                                                           Cultural and Social Club
                                                   The map below indicates the penetration of community ownership of sports clubs                                                                                                                          Gezira
                                                   across Africa (indicating clubs which are currently community-owned or have a                                                                                                                           Al Tersana
                                                                                                                                         AC Djoliba
                                                   history of community ownership). The map is not intended to be definitive and we                                                                                                                        Al Zohour
                                                   would welcome additional contributions.

                                                   Algeria - Entente Sportive de Sétif, JS Kabylie
                                                   Democratic Republic of Congo - AS Vita Club

                                                   Egypt - Al Ahly, Zamalek, Smouha, Al Masry, Ismaily, Ittihad of Alexandria,                                                                                                               St. George
                                                   Heliopolis, Gezira, Al Tersana and Al Zohour                                                                                                                                              Ethiopia Coffee      Gor Mahia
                                                                                                                                                                                                                                                                  AFC Leopards
                                                   Ethiopia - St. George, Ethiopia Coffee
                                                                                                                                                                                                                                                                  Mathare United
                                                   Ghana - Keta Sandlanders                                                                                                                                                                                       Thika United
                                                                                                                                                                                                                                                                  Muhoroni Youth
                                                   Ivory Coast - ASEC Mimosas
                                                                                                                                                                                                                                                                  Ligi Ndogo
                                                   Kenya - Gor Mahia, AFC Leopards, Mathare United, Thika United, Muhoroni Youth,
                                                   Ligi Ndog                                                                           Shining Stars

                                                   Liberia - VOA FC
                                                   Libya - Al-Ahly Benghazi Sports Cultural and Social Club

                                                   Mali - AC Djoliba

                                                   Morocco - Raja Casablanca                                                                ASEC Mimosas                                                                                                       Mutundwe Lions

                                                   Sierra Leone - Shining Stars FC                                                                         Keta Sandlanders

                                                   Sudan - Al-Hilal, Al-Merrikh                                                                                                AS Vita Club                                                            Kilimani City

                                                   Tanzania - Young Africans, Simba SC, Coastal Union
                                                                                                                                                                                                                                                       Young Africans
     “many of the region’s
                                                   Tunisia - Club Sportif Sfaxien, Espérance Sportive de Tunis, ES Sahel                                                                                                                               Simba
     most successful clubs                                                                                                                                                                                                                             Coastal Union
                                                   Uganda - Mutundwe Lions
     are established as
                                                   Zambia - Kalingalinga on the Ball
     multi-sports associations
                                                   Zanzibar - Kilimani City                                                                   SOUTH
     based on the same                                                                                                                                                   Kalingalinga on
                                                                                                                                              ATLANTIC                   the Ball
     model used throughout
     German football “

                                                                                                                                                       = Sandlanders Network Clubs                                                                           OCEAN

                                                   ANALYSIS – KEY FEATURES OF COMMUNITY-OWNED CLUBS
SANDLANDERS & SUPPORTERS DIRECT ©                                                                                                                                                                                                                SANDLANDERS & SUPPORTERS DIRECT ©
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12                                                                                                                                                                                                                                                                                          13

                                                                                                                                                and national level. Decision-making structures of football            state governments but the recent Nigerian Club Licensing
                                                                                                                                                clubs and governing bodies need to be improved in order to            Regulations impose a rule ultimately requiring all clubs
                                                                                                                                                encourage long-term sustainability. The German case study             to establish themselves as commercial entities in which
                                                   •        We have reviewed structures that include registered and unregistered                set out in this report offers best practice in this area.             no single party can own more than 30% of the shares. If
                                                            ‘societies’, ‘associations’ and co-operatives. The form varies from country-to-                                                                           implemented in full, the regulations will have a transformative
                                                                                                                                                African sports clubs have had varying success in establishing
                                                            country based on local enabling legislation. In Tunisia for instance, clubs are                                                                           effect on Nigerian football and reduce state involvement in
                                                                                                                                                community ownership. In the worst cases, community-owned
                                                            unable to establish more formal ‘Societies’ and only non-profit-making                                                                                    the game.
                                                                                                                                                clubs are vulnerable to corruption, undue influence and over-
                                                            associations are permitted (e.g. Esperance).
                                                                                                                                                politicization and no longer satisfy the definition of community
                                                   •        Members generally exercise their control by electing a President in elections       ownership set-out in this report.
                                                                                                                                                                                                                      3. PRIVATE OWNERSHIP
                                                            held every 4 years and otherwise being able to attend annual and special
                                                            general meetings of the club.                                                                                                                             Private ownership of sports clubs in Africa is on the rise
                                                                                                                                                2. STATE OWNERSHIP                                                    as additional commercial sponsorship and other corporate
                                                   •        In general, little financial information is provided to members and their powers
                                                                                                                                                                                                                      involvement (in some countries at least) makes investment a
                                                            are limited.                                                                        State ownership of sports clubs is a reflection of a ‘big’ state
                                                                                                                                                                                                                      more viable proposition.
                                                                                                                                                but also of an economic reality that in some cases only the
                                                   •        The origins and evolution of community-owend clubs are complicated (often
                                                                                                                                                state has available funds to provide effective support to             African football has long been home to clubs privately owned
                                                            tied closely with in-country social and political developments) and should not
                                                                                                                                                clubs. These factors have combined across Africa in recent            by wealthy individuals (e.g. TP Mazembe, Kaizer Chiefs
                                                            be over-simplified.
                                                                                                                                                decades to result in widespread state involvement in sports           and Mamelodi Sundowns) or corporate groups looking to
                                                                                                                                                clubs.                                                                promote a brand or provide a social outlet for employees
                                                   SUCCESSES                                                                                                                                                          (e.g. East Africa Breweries’ Tusker FC in Kenya or Azam FC
                                                                                                                                                State clubs typically represent major state instructions such
                                                                                                                                                                                                                      in Tanzania). It is likely that the level of sophistication of this
                                                   •        LONGEVITY - many of the most successful community-owned clubs were                  as the army, revenue authority or city councils. Successful
                                                                                                                                                                                                                      model will increase as economies develop resulting in better
                                                            established in the first part of the twentieth century.                             examples include APR (the Rwandan military); URA (Uganda
                                                                                                                                                                                                                      equipped owners and more money in the game.
                                                                                                                                                Revenue Authority); Zesco (the Zambia Electricity Authority)
                                                   •        SUPPORTERS - the biggest community-owned clubs generally have large fan
                                                                                                                                                and most notably Nigeria’s Enyimba (backed by the Abia                As the most successful league in Africa both administratively
                                                            bases. Clubs may have a potential fan base of millions with thousands of
                                                                                                                                                State Government) who are all regular champions of their              and financially, South Africa’s PSL best illustrates this trend.
                                                            registered members e.g. Yanga and Simba in Tanzania - millions of supporters
                                                                                                                                                domestic leagues.                                                     The league operates on a freely tradable ‘franchise’ basis
                                                            across the country and around 12-13,000 registered members. In Egypt,
                                                                                                                                                                                                                      (similar to America’s MLS), which has resulted in a diverse
                                                            between 10,000-20,000 members vote in club elections17. Zamalek’s current           While these clubs have helped to fill a gap in funding in
                                                                                                                                                                                                                      portfolio of investors but, as we consider in our South Africa
                                                            membership stands at around 54,000 and since membership is one per family,          recent years, they are usually entirely reliant on state
                                                                                                                                                                                                                      case study, the model brings its own challenges in terms
                                                            there are many more individual members.                                             support for revenue in the absence of a significant fan base
                                                                                                                                                                                                                      of developing an effective fan base and diverse revenue
                                                                                                                                                to contribute gate receipts or a more developed commercial
                                                   •        ON FIELD SUCCESS - Africa’s most decorated clubs are community-owned. Four                                                                                streams.
                                                                                                                                                strategy. With this in mind, it is likely that such clubs will play
                                                            of the five clubs with the most CAF titles (Al Ahly, Zamalek, ES Sahel, TP
                                                                                                                                                less of a prominent role in future as the game is increasingly
                                                            Mazembe and JS Kabylie) are community-owned to some extent (TP Mazembe
                                                            being the exception).
                                                                                                                                                Nigeria provides a good example of this trend. Currently,
                                                                                                                                                almost all Nigerian Premier League clubs are owned by

                                                   •        ADMINISTRATION - despite their large fan bases and on-pitch success, the larger
     “benefits will only                                    member-owned clubs face complicated and deep-rooted administrative
                                                            difficulties. Such is the influence of the clubs amongst their supporters and the
     be realized if the                                     wider population that, if unprotected by robust regulation, the institutions are
     community ownership                                    vulnerable to over-politicization. In such cases, the principles of democracy,
                                                            transparency and accountability may be compromised.
     model is implemented
                                                   •        FINANCIAL ISSUES - in a number of cases, community-owned clubs have become
     in accordance with its                                 over-dependent on state support and do not otherwise run as financially
     core principles which                                  sustainable businesses. The lack of a stable financial base contributes further
                                                            to over-politicization of the clubs.
     include democracy,
     transparency and
                                                   THE VALUE OF COMMUNITY OWNERSHIP
                                                   Supporters Direct have conducted extensive research into the benefits of community
                                                   ownership of sports clubs in Europe. Their research concluded that supporter community
                                                   ownership creates “long-term, deep and sustainable partnerships with key strategic

                                                   However, these benefits will only be realized if the community ownership model
                                                   is implemented in accordance with its core principles which include democracy,
                                                   transparency and accountability. Furthermore, for community ownership of clubs to fully
                                                   deliver these benefits, comprehensive regulation of clubs is required - at a continental

14                                                                                                                                                                                                                                                                                    15

                                                                                                                                                                                      “The regulations require clubs
                                                                                                                                                                                      to provide evidence of their
                                                                                                                                                                                      incorporation and public
PART II: CLUB LICENSING                                                                                                                                                               registration and also to prepare
                                                                                                                                                                                      independently audited accounts.”

                                                                                                                                           capacity, governance and control and       •   Creation    of    decision-making          •   Nigeria has created the relevant
                                                                                                                                           infrastructure) are in urgent need of          bodies i.e. First Instance Body                decision-making bodies and also
                                                                                                                                           improvement and the Regulations                and Appeal Body.                               adopted a set of comprehensive
                                                                                                                                           provide a clear basis for improved                                                            licensing regulations which shall
                                                                                                                                                                                      •   Organisation of a seminar            for
                                                                                                                                           regulation in African football if                                                             be effective from 30 November
                                                                                                                                                                                          premier league clubs.
                                                                                                                                           implemented, monitored and enforced                                                           2014.
                                                                                                                                           effectively on an on-going basis.

                                                                                                                                           From a club structuring perspective, the   PHASE 2: Expiring 30 November 2014:
                                                                                                                                           Regulations require clubs to provide
                                                                                                                                                                                      •   National         club       licensing
                                                                                                                                           evidence of their incorporation and                                                       Implementing and enforcing the
                                                                                                                                                                                          regulations     to    become     fully
                                                                                                                                           public registration and also to prepare                                                   Regulations      to   strengthen     the
                                                                                                                                                                                          operational. This      includles the
                                                                                                                                           independently audited accounts. As                                                        administration of football in Africa will
                                                                                                                                                                                          organisation of national seminars,
                                                                                                                                           well as addressing issues such as                                                         face the following challenges:
                                                                                                                                                                                          rendering      the decision-making
                                                                                                                                           transparency and accountability, an
                                                                                                                                                                                          bodies operational and undertaking
                                                                                                                                           increase in corporate confidence should
                                                                                                                                                                                          the necessary work to permit the
                                                                                                                                           result from clubs being committed                                                         •   Certain MAs (some will be
                                                                                                                                                                                          issuance of licenses to clubs.
                                                                                                                                           to legally binding statutes, rules and                                                        better prepared than others) will
                                                                                                                                           regulations.                               Under the Regulations, CAF shall carry             struggle    with    the  additional
                                                                                                                                                                                      out spot checks within the MAs to ensure           administrative burden imposed
                                                                                                                                                                                      that licences have been correctly issued           by the need to develop and enforce
                                                                                                                                           IMPLEMENTATION                             to clubs under the national licensing              national regulations.
                                                                                                                                                                                      regulations and may sanction the
                                                                                                                                           Following slow initial implementation of                                                  •   In many cases (particularly at lower
                                                                                                                                                                                      relevant MA for breach.
                                                                                                                                           the Regulations by MAs and the missing                                                        league level) clubs will lack both
“corporate confidence                              CAF CLUB LICENSING REGULATIONS 2012         •   Adapting and improving          club    of various deadlines for implementation,   As at October 2014, a number of MAs                the funds and expertise required
should result from clubs                                                                           sporting infrastructure                 CAF has most recently mandated             are still in default in their implementation       to make the necessary changes to
                                                   The Regulations were approved by the
                                                                                                                                           MAs to implement the Regulations in        of the Regulations. Of the countries               comply with the national licensing
being committed to                                 Executive Committee of African football’s   •   Improving the economic and
                                                                                                                                           two phases from January 2014 to 30         considered in our case studies:                    regulations.
                                                   governing body on 19 January 2012,              financial  capacity    of    clubs,
legally binding statutes,                                                                                                                  November 2014 (with non-compliant
                                                   coming into force on 1 March 2012.              through     proper        corporate                                                •   Egypt has approved national club           •   Certain problems (e.g. over-politici-
                                                                                                                                           countries risking exclusion from the CAF
rules and regulations.”                                                                            governance and control                                                                 licensing regulations and nominated            sation and a lack of administrative
                                                   The Regulations contain the following                                                   Club Competitions for the 2015 season):
                                                                                                                                                                                          the relevant decision-making                   accountability) will remain unless
                                                   overarching objectives, which mirror        •   Ensuring and guaranteeing the
                                                                                                                                                                                          bodies. EPL clubs have submitted               MAs implement above the basic
                                                   those set out by FIFA in their 2008 Club        continuity     of       international
                                                                                                                                                                                          their files to the EFA for approval by         requirements set out by CAF (e.g.
                                                   Licensing Regulations:                          competitions during the season          PHASE 1: Comprising four steps to be
                                                                                                                                                                                          the First Instance Body.                       by introducing further requirements
                                                                                                                                           completed by 31 January 2014:
                                                   •   Promoting and improving the quality     •   Allowing    parallel  development                                                                                                     relating   to     qualifications  for
                                                                                                                                                                                      •   Kenya is yet to adopt national club
                                                       and level of all football aspects in        and comparison amongst clubs by         •   Insertion of statutory clauses                                                            ownership - a ‘fit and proper person’
                                                                                                                                                                                          licensing regulations.
                                                       Africa.                                     ensuring necessary compliance in            adopting   the     club licensing                                                         test – and supporter representation
                                                                                                   terms of financial, sporting, legal,        system in MA statutes.                 •   South Africa created relevant                  at shareholder and board level).
                                                   •   Ensuring that all clubs have
                                                                                                   administrative   and infrastructure                                                    decision-making bodies and
                                                       the    appropriate  infrastructure,                                                 •   Establishment of national      club
                                                                                                   criteria.                                                                              adopted a set of comprehensive
                                                       knowledge       and     application                                                     licensing regulations.
                                                                                                                                                                                          licensing regulations in 2012.             RECOMMENDATIONS
                                                       in respect of management and            The areas identified for development
                                                       organisation.                           (most notably economic and financial

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                                                   Overall, the Regulations certainly provide a foundation for change but will need to
                                                   be implemented carefully with attention paid to the circumstances of MAs and clubs.

                                                   In 2011, a research thesis completed for the International Centre for Sports Studies
                                                   (CIES) entitled ‘African Football Realities: Moving towards a Club Licensing System’
                                                   , which included case study assessment of Kaizer Chiefs (South Africa); Kumasi
                                                   Asante Kotoko (Ghana); Paradou AC (Algeria); Mathare United (Kenya) and Stade
                                                   Malien (Mali), highlighted that African clubs and national associations “evolve in
                                                   intrinsic football realities based on different socio-economic, political and sporting

                                                   Based on the research carried out in the thesis, four major needs and priorities of
                                                   African clubs and national associations were identified as follows:

                                                   1.       EDUCATION (need for trained sport managers & administrators and special
                                                            training on the club licensing system)

                                                   2.       FINANCE (need to increase financial incentives for participation in CAF
                                                            inter-club competitions – or greater travel/accommodation subsidies – and
                                                            financial support for club licensing implementation)

                                                   3.       YOUTH DEVELOPMENT AND PROTECTION (need to promote structured youth
                                                            development systems and strengthen the protection of African youth

                                                   4.       INFRASTRUCTURE (need for consistent accessibility and safety/security for
                                                            players and fans)

                                                   A report from the African Sports Law and Business Bulletin entitled “Club Licensing
                                                   in African Football - Are we there Yet?”20 also highlighted the reality that some
                                                   regulations will be more easily enforceable in certain countries rather than others
                                                   and the need for education and information for the concerned MAs and clubs.

                                                   Based on the above and our own review of the licensing process to date we
                                                   recommend that:

                                                   1.       The priorities identified in the CIES research thesis and the associated
                                                            recommendations (such as a special fund to assist with the implementation
                                                            of the licensing process, educational seminars and a digital knowledge
                                                            exchange tool) should be contemplated by CAF and MAs as part of the
                                                            implementation process.

                                                   2.       CAF establish a division with a focus on club development that will be
     “The Regulations                                       responsible for the on-going education of MAs to enable those MAs to
     certainly provide a                                    in turn educate and support their clubs to assist with compliance of the
                                                            national regulations.
     foundation for change
                                                   3.       MAs consider additional regulations that would assist to address some
     but will need to be                                    of the core issues impeding the development of football in their jurisdiction
     implemented carefully                                  e.g. regulations to more tightly regulate corporate governance; ownership
                                                            (as the Nigerian regulations have done) and provide for the involvement
     with attention paid to                                 of supporters at both board and shareholder level.
     the circumstances of                          4.       Clubs establish working groups with their interested stakeholders (both
     MAs and clubs.”                                        public and private and including supporters, local authorities and corporate
                                                            sponsors) to consider how best to manage the increased regulatory
                                                            requirements particularly those related to infrastructure, youth systems and
                                                            other areas requiring significant investment.

18                                                                                                                                                                                                                                                                                       19

                                                                                                                                                             “Clubs that are run with a view to the long term
                                                                                                                                                             interests of their key stakeholders, rather than
PART III:                                                                                                                                                    the short term interest of shareholders are more
SD EUROPE CASE STUDY: CLUB LICENSING IN                                                                                                                      likely to prosper.….”

                                                                                                                                               Business    benefits     of    supporter    company (AG), or a limited partnership       However, this does not mean that the
                                                                                                                                               ownership22 include:                        with one general partner that is liable      twelve other clubs competing in the
                                                                                                                                                                                           without limitation (KGaA).                   Bundesliga this season are not in the
                                                                                                                                               •   Longer term and more sustainable
                                                                                                                                                                                                                                        control of private investors – thanks to
                                                                                                                                                   partnerships with key strategic         However, as well as conventional
                                                                                                                                                                                                                                        the rule which has become known as ‘50
                                                                                                                                                   partners.                               businesses, Germany also has a strong
                                                                                                                                                                                                                                        + 1’. Under German Football Association
                                                                                                                                                                                           tradition of members’ associations,
                                                                                                                                               •   A range of business and funding                                                      (DFB) statutes, the parent club (i.e. the
                                                                                                                                                                                           based on community and social values.
                                                                                                                                                   opportunities, from help with                                                        members’ association) must retain the
                                                                                                                                                                                           These are known as eingetragener
                                                                                                                                                   development of new facilities, to                                                    majority shareholding of the separated
                                                                                                                                                                                           Verein (e.V), and around 550,000 exist
                                                                                                                                                   innovative finance, to attracting                                                    limited company, which means the
                                                                                                                                                                                           in Germany today.
                                                                                                                                                   sponsors keen to be associated with                                                  majority of votes – 50% plus one. The
                                                                                                                                                   ‘ethical’ football clubs.               This tradition of cooperation has exerted    rule has two main intentions:
                                                                                                                                                                                           a powerful influence on the development
                                                                                                                                               •   Greater supporter resilience and                                                     •   To safeguard the influence of the
                                                                                                                                                                                           of German football. Prior to 1998, all
                                                                                                                                                   higher satisfaction, strengthening                                                       parent club in the decision-making
                                                                                                                                                                                           football clubs were structured as e.Vs,
                                                                                                                                                   the long-term organisation.                                                              process; and
                                                                                                                                                                                           owned by their members and managed
                                                                                                                                               The introduction of comprehensive,          by democratically elected representa-        •   To prevent a distortion of sporting
                                                                                                                                               over-arching club licensing systems on      tives. Any revenue generated by e.Vs             competition.
                                                                                                                                               the domestic level, provides the ideal      has to, by law, be invested back into
                                                                                                                                                                                                                                        There are two exceptions to this rule:
                                                                                                                                               method of ensuring these benefits           the organisation (in this case, the
                                                                                                                                                                                                                                        Bayer Leverkusen, and VFL Wolfsburg.
                                                                                                                                               stand a better chance of being realised.    football club). As well as a tradition of
                                                                                                                                                                                                                                        In both cases, the clubs are 100%
                                                                                                                                               In terms of best practice, the system       cooperation, many German football
                                                                                                                                                                                                                                        subsidiaries of industrial groups (Bayer,
                                                                                                                                               employed by Germany’s football stands       teams were established as ‘sections’ of
                                                                                                                                                                                                                                        a chemical corporation, and Volkswagen,
                                                                                                                                               out from the rest.                          multi-sport clubs, as is the case in many
“Clubs that                                                                                                                                                                                                                             a car manufacturer). In 2011 it was
                                                   INTRODUCTION                                supporter involvement and ownership                                                         European countries. In the 2014/15
                                                                                                                                                                                                                                        ruled that sponsors with over 20 years’
constitutionally have                                                                          include:                                                                                    Bundesliga, six clubs (1. FSV Mainz
                                                   Decision-making structures of football                                                                                                                                               involvement in a club could take majority
                                                                                                                                               CONTEXT – THE ‘50+1’ RULE                   05, FC Augsburg, FC Schalke 04, SC
to reinvest profit                                 clubs need to be improved to encourage      •   Clubs that are run with a view to                                                                                                    shareholdings – though only with the
                                                                                                                                                                                           Freiburg, SC Paderborn 07, and VfB
                                                   long-term       sustainability.   Current       the long term interests of their key        As a starting point, it is important to                                                  consent of the members, of course.
into their activities                                                                                                                                                                      Stuttgart 1893) are structured as e.Vs.
                                                   governance frameworks disadvantage              stakeholders, rather than the short         recognise the wider cultural norms that                                                  This was in response to the Chairman of
are more financially                               clubs that operate sustainable, long-term       term interest of shareholders are           have led to the establishment of what can   Since 1998, clubs have been permitted        Hannover 96, Martin Kind, who submitted
                                                   financial policies. Despite the severity        more likely to prosper21.                   broadly be referred to as the ‘German       to incorporate their professional football   a motion to abolish the ‘50+1’ rule – he
sustainable. ”                                     of the problem, it is solvable. It is a                                                     model.’ Over the last half-century,         sections into external limited companies,    was unsuccessful. Thus, democratic
                                                                                               •   There is increased accountability
                                                   governance crisis that causes an                                                            Germany has been characterised as           separated from the ‘parent club’. The        supporter ownership or at the very least
                                                                                                   and scrutiny associated with
                                                   economic one. The financial resources                                                       a society that values cooperation and       League Association (DFL, of which all 36     supporter control remains enshrined in
                                                                                                   stakeholder   involvement   and
                                                   are available to redress the situation                                                      consensus, something that extends to its    professional clubs in the Bundesliga and     the regulatory fabric of German football.
                                                   through a more holistic approach.                                                           typical system of corporate governance.     2. Bundesliga are members) decided
                                                                                               •   Clubs that constitutionally have to         The concept of a supervisory and            to permit this with both commercial and
                                                                                                   reinvest profit into their activities are   a management board (which exist             competitive reasons in mind.
                                                   Ultimately,      ensuring      financial
                                                                                                   more financially sustainable.               independently of one another) is a
                                                   sustainability and probity in football
                                                                                                                                               cornerstone of the German corporation,
                                                   requires better regulation hand in hand
                                                                                                                                               whether it is a private limited liability
                                                   with formalised supporter involvement.
                                                                                                                                               company (GmbH), a public limited
                                                   Structured benefits of formalised

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                                                   PROCESS – CLUB LICENSING IN THE 1. BUNDESLIGA AND 2. BUNDESLIGA                              Following the liquidity forecast and            Should a gap be found, clubs:                  a close examination of the Bundesliga’s
                                                                                                                                                assessment of the criteria listed above,                                                       licensing procedure, as well as its
                                                                                                                                                                                                •   Are given a month to secure new
                                                                                                                                                four scenarios are possible:                                                                   protection of member ownership.
                                                                                                                                                                                                    income streams
                                                   Whilst the ‘50+1’ rule underpins this regulatory fabric, a comprehensive club licensing
                                                                                                                                                •   Positive liquidity at the end of the                                                       We believe that the involvement of
                                                   system takes care of the day-to-day operations of clubs. The fundamental aim of the                                                          •   Are barred from acting in the
                                                                                                                                                    season where a license is being                                                            supporters in governance at club and
                                                   licensing system is to safeguard the operations of all league members during the                                                                 January transfer window without
                                                                                                                                                    applied for is proved; financial                                                           national governing body levels can
                                                   season and to ensure stability, integrity and continuity of the competition(s)23. ‘50 + 1’                                                       DFL approval
                                                                                                                                                    criteria are fulfilled = a license is                                                      provide a greater level of scrutiny,
                                                   is the bedrock of the system, but there are also a number of specific criteria, which
                                                                                                                                                    granted unconditionally, with no            •   Face fines for late submission of          independence,        accountability      and
                                                   address the competence of the management team and, crucially, the financial state
                                                                                                                                                    further obligations                             documents, and;                            transparency than is evident at present,
                                                   of the club. The licensing system also sets out guidelines for transparent corporate
                                                                                                                                                                                                                                               and will lead to better and more balanced
                                                   governance.                                                                                  •   Positive liquidity could only been          •   Could have points deductions
                                                                                                                                                                                                                                               decision making in the best long term
                                                                                                                                                    proven after the fulfilment of certain          imposed should the month-long
                                                   Under the terms of the licensing procedure, clubs are requested to produce economic                                                                                                         interests of the sport, and the institutions
                                                                                                                                                    conditions; financial criteria are              window elapse.
                                                   data for examination by the relevant authorities. The rationale behind this is a desire                                                                                                     (clubs) that play such an important
                                                                                                                                                    fulfilled = a license is granted with
                                                   to prevent/reduce club overspending through specified planning, and an annual                                                                                                               role in the life of supporters and their
                                                                                                                                                    certain obligations for the season in
                                                   license application. Clubs are required to apply to the German Football League                                                                                                              communities.
                                                                                                                                                    question                                    BENEFITS: A SUSTAINABLE SYSTEM WITH
                                                   (DFL), which assesses the application and issues the license.
                                                                                                                                                                                                STRUCTURED SUPPORTER INVOLVEMENT               However, only a robust regulatory
                                                                                                                                                •   Positive liquidity at the end of the
                                                   Applications are assessed by examining “…a range of criteria covering sporting,                                                                                                             environment can help to protect clubs
                                                                                                                                                    season is proven, but the balance           By receiving a license, all clubs also
                                                   legal, staffing, administrative, infrastructural, security, media-technical and above all                                                                                                   who apply sustainable financing methods
                                                                                                                                                    sheet as of December 31st reveals           enter into an agreement to (if requested)
                                                   financial competence.”24                                                                                                                                                                    from being outmuscled by clubs that
                                                                                                                                                    net debt (i.e. negative equity);            provide clubs in financial difficulties with
                                                                                                                                                                                                                                               simply live above their financial capacity.
                                                   Financial competence must be demonstrated by proof of solvency and positive                      financial criteria are fulfilled = a        aid from the income received as part of
                                                                                                                                                                                                                                               Domestic leagues need a ‘multi-faceted
                                                   liquidity, taking into account the following key factors:                                        license is granted, but with the            the collective television rights agreement.
                                                                                                                                                                                                                                               approach’ to increase sustainability
                                                                                                                                                    obligation to improve the club’s            Of course, this would have the effect of
                                                                                                                                                                                                                                               and competitive balance: (a) sound
                                                                                                                                                    equity position as of December 31st         well-run clubs receiving less TV income
                                                                                                                                                                                                                                               regulatory environment, (b) supported by
                                                   •   ASSETS                                                                                       by a certain percentage                     than they are entitled to, simply in order
                                                                                                                                                                                                                                               distribution model that avoids creation of
                                                                                                                                                                                                to plug the gaps of others. However, the
                                                   •   RECEIVABLES                                                                              •   Positive liquidity is not proven;                                                          major wealth gaps that cause systematic
                                                                                                                                                                                                reality is that the potential support is
                                                                                                                                                    financial criteria are not fulfilled = no                                                  and behavioral problems.
                                                   •   CASH AND BANK BALANCES                                                                                                                   capped at two months’ salary costs, and
                                                                                                                                                    license is awarded
                                                                                                                                                                                                is accompanied by a point deduction.
                                                   •   LIABILITIES/PROVISIONS
                                                                                                                                                Should a club be refused a license, they        Indeed, no club has requested aid of this
                                                   •   CURRENT OVERDRAFT ACCOUNT FACILITIES                                                     can appeal to the licensing committee,          kind since 2004, when it was introduced.
                                                                                                                                                and if the appeal is unsuccessful the
                                                   •   LOAN COMMITMENTS                                                                                                                         Furthermore, this aid was introduced
                                                                                                                                                Court of Arbitration for the appropriate
                                                                                                                                                                                                based on the collective understanding
                                                   •   PROJECTED PROFIT AND LOSS STATEMENTS                                                     division (1. Bundesliga or 2. Bundesliga).
                                                                                                                                                                                                within German football that financial
                                                                                                                                                Should their appeal be successful
     “The current success                          •   PLANNED INCOME FROM MATCH OPERATIONS
                                                                                                                                                there the application is returned to the
                                                                                                                                                                                                difficulties of any one club will inevitably
                                                                                                                                                                                                have an impact on the day-to-day
     and long-term stability                       •   PLANNED ADVERTISING INCOME                                                               licensing committee and, finally, the
                                                                                                                                                                                                functioning of others – in essence: clubs
                                                                                                                                                League Association. If, after all these
     of the Bundesliga can                         •   PLANNED TRANSFER-RELATED INCOME
                                                                                                                                                avenues are exhausted a club has still
                                                                                                                                                                                                accept the fact that they depend on
                                                                                                                                                                                                one another, and financial sustainability
     be directly attributed to                     •   PLANNED PAYROLL COSTS FOR MATCH OPERATIONS                                               not received a license, they are banned
                                                                                                                                                                                                benefits everyone. Taking the historical
                                                                                                                                                from competing in the forthcoming
     its structure of member                       •   CASH INFLOWS/OUTFLOWS FROM INVESTING AND FINANCING ACTIVITIES.
                                                                                                                                                                                                view underlines this point: no Bundesliga
                                                                                                                                                                                                club has experienced an insolvency
     ownership of clubs, and                                                                                                                                                                    event since the league was established
     the implementation                            As well as these listed criteria, a liquidity forecast is undertaken as part of the
                                                                                                                                                WHAT HAPPENS DURING THE SEASON?
                                                                                                                                                                                                in 196325.
                                                   assessment process, based on figures provided by each club, with commentary from
     of a strict licensing                         their auditors. These figures must cover an eighteen-month period from the previous          As well as the close season licensing
     system that imposes                           December 31st – and crucially, anything that cannot be evidenced on paper (i.e. in           process, the German system also                 CONCLUSION: WHAT CAN BE LEARNED?
                                                   the form of a contract) is ineligible for submission.                                        includes monitoring during the course of
     financial sustainability                                                                                                                   a season, with a similar aim of proving
                                                                                                                                                                                                The current success and long-term
                                                   he DFL are allowed to reduce projected income, or indeed increase projected                                                                  stability of the Bundesliga can be
     on those clubs that                           expenditures based on the figures provided – a scenario which sometimes occurs
                                                                                                                                                economic capacity. All clubs are required
                                                                                                                                                                                                directly attributed to its structure of
                                                                                                                                                to submit revised and fully audited
     wish to participate in                        when considering intended cost-cutting through player salary reduction, or budgeted
                                                                                                                                                accounts up to June 30th, a revised
                                                                                                                                                                                                member ownership of clubs, and the
                                                   income from ticket sales.                                                                                                                    implementation of a strict licensing system
     the German football                                                                                                                        budget for the upcoming season, as well
                                                                                                                                                                                                that imposes financial sustainability on
                                                                                                                                                as an auditor’s report covering the period
     pyramid“                                                                                                                                   up until October 31st. The DFL are
                                                                                                                                                                                                those clubs that wish to participate in
                                                                                                                                                                                                the German football pyramid. Clearly,
                                                                                                                                                thus able to detect any gaps in positive
                                                                                                                                                                                                the socio-cultural context outlined above
                                                                                                                                                liquidity, and act accordingly.
                                                                                                                                                                                                cannot be transplanted onto other
                                                                                                                                                                                                countries, but the building blocks of a
                                                                                                                                                                                                more sustainable system are provided by

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                                                                                                                                           GOVERNING BODY: . Founded 1921, FIFA affiliated 1923

PART IV:                                                                                                                                   RELEVANT GOVERNMENT BODIES: Ministry of Youth and Sports, National Sports Council
                                                                                                                                           RELEVANT LAWS: Constitution of the Arab Republic of Egypt (2014); Sports Law (1975), new Sports Law in development
                                                                                                                                           CAF RANKING: 13
COUNTRY CASE STUDIES                                                                                                                       FIFA RANKING: 61
                                                                                                                                           LEAGUES: Egyptian Premier League (EPL - 20 teams); Second Division (3 groups of 16 teams); Third Division, Fourth Division.

EGYPT                                                                                                                                      EPL organised by the EFA.
                                                                                                                                           STATUS OF CLUB LICENSING REGULATIONS: EFA national club licensing regulations in force

                                                                                                                                           1.   COMMUNITY CLUBS                            3.     PRIVATE CLUBS                          The founding dates in the table below
                                                                                                                                                                                                                                         indicate how structures have evolved
                                                                                                                                           •    Registered as associations. All            •      Usually via a private company
                                                                                                                                                                                                                                         over time. In general, the big community
                                                                                                                                                sports entities established pre-1975
                                                                                                                                                                                           •      e.g. Wadi Degla (part of the Wadi      clubs were incorporated first, with state
                                                                                                                                                were reregistered under the sports
                                                                                                                                                                                                  Degla investment group, who also       teams to follow and some private clubs
                                                                                                                                                law of that year (either as private
                                                                                                                                                                                                  own Lierse SK in Belgium)              now developing.
                                                                                                                                                authorities or ‘public interest’
                                                                                                                                                                                          TABLE 2 - EGYPTIAN PREMIER LEAGUE CLUB STRUCTURES26
                                                                                                                                           •    Includes both big teams with large
                                                                                                                                                fan-bases run by members who
                                                                                                                                                democratically elect a president                       CLUB            STRUCTURE      FOUNDED     MEMBERS/OWNERS              FACEBOOK
                                                                                                                                                for four-year terms (as per the
                                                                                                                                                club’s statues) and smaller clubs                     AL AHLY           Community       1907        Registered members          5,721,620
                                                                                                                                                (e.g. Heliopolis and Gezira) which
                                                                                                                                                                                                    ZAMALEK SC                          1911         c. 54,000 registered       2,744,504
                                                                                                                                                operate on the same basis and                                           Community                          members
                                                                                                                                                where supporter involvement is key
                                                                                                                                                                                                  EL DAKHLEYA FC           State        2005           Egyptian Army                -
                                                                                                                                                and members are obliged to attend
                                                                                                                                                                                                    SMOUHA SC           Community       1949        Registered members              -
                                                                                                                                                elections. Under the association
                                                                                                                                                structure, no profits are distributed              AL MASRY SC          Community       1920        Registered members           264,056
                                                                                                                                                to the board or the members.                    MISR EL-MAQASSA SC         State        1937                  -                     -

                                                                                                                                           •    Clubs are considered as sporting                HARAS EL-HODOOD SC         State        1950                  -                     -
                                                                                                                                                and social clubs and their boards                    AL-RAGAA                -           -                    -                     -
                                                                                                                                                are responsible for providing                       ISMAILY SC          Community       1924        Registered members            5,024
“The fall-out from Port                                                                                                                         non-sporting social services for
                                                   BACKGROUND                                 return to stadia well over two years after                                                       ITTIHAD OF ALEXANDRIA    Community       1914        Registered members            9,615
                                                                                                                                                members (e.g. Zamalek recently
Said and other events                                                                         the ban was introduced.                                                                            ITTIHAD EL-SHORTA         State        1980           Egyptian Police              -
                                                   Historically one of Africa’s strongest                                                       opened a seaside resort) and
over the last few years has                        footballing nations, both in terms of      The fall-out from Port Said and other             funding the football, handball, futsal,          TALA’A EL-GAISH SC                     1995        Egyptian Army/Interior          -
                                                                                                                                                                                                                           State                           Ministry
                                                   its national side and its local league,    events over the last few years has drawn          tennis and volleyball operations of
drawn attention to the                             Egyptian football has endured a torrid     attention to the links between Egyptian           the club.                                              ENPPI                            1985         ENPPI (state-owned             -
                                                                                                                                                                                                                           State                    engineering company)
links between Egyptian                             few years since the 2011 Revolution.       politics and sports clubs and reform
                                                                                                                                           2.   STATE CLUBS
                                                                                              of the country’s sports laws is high on                                                             WADI DEGLA SC                         2002       Wadi Degla Investment         37,557
politics and sports clubs”                         After the nadir of the Port Said stadium                                                                                                                               Private                         Group
                                                                                              the agenda of international observers.       •    Owned and funded by state-owned
                                                   disaster in which 74 fans lost their
                                                                                              However, separating Egyptian sports               companies, Ministries or agencies                  EL-GOUNA FC            Private       2003                  -                  55,313
                                                   lives on 2 February 2012 following a
                                                                                              and politics (as mandated by both the                                                             ARAB CONTRACTORS                        1972        El-Mokawloon El-Arab            -
                                                   match between Al Masry and Al Ahly,                                                     •    Limited numbers of fans, no
                                                                                              IOC and FIFA) will be a complex task.                                                                                        State                  (state-owned construction
                                                   the Egyptian Premier League was                                                              members and usually run by a                                                                              company)
                                                   suspended for over a year.                 CLUB STRUCTURES                                   delegate of the Ministry involved
                                                                                                                                                                                                     PETROJET                           1980        Petrojet (state-owned           -
                                                                                                                                                in the club e.g. El Geish and the                                          State                    petroleum company)
                                                   The 2013/14 and on-going 2014/15           Egyptian sports club structures may
                                                                                                                                                Interior Ministry
                                                   seasons have been played behind            broadly be broken down into the following                                                            DAMANHOUR                 -           -                    -                     -
                                                   closed doors with the security situation   three categories:                                                                                   ASSIOUTY SPORT          Private        -          Assiouty Sport Resort        115,448
                                                   still deemed too sensitive for fans to
                                                                                                                                                                                                      AL-NASR                -           -                    -                     -

SANDLANDERS & SUPPORTERS DIRECT ©                                                                                                                                                                                                                          SANDLANDERS & SUPPORTERS DIRECT ©
FIRST AFRICA REPORT: CLUB STRUCTURES & LICENSING                                                                                                                                                                                               FIRST AFRICA REPORT: CLUB STRUCTURES & LICENSING

INFRASTRUCTURE                                     -owned clubs in particular which have         regional matches during the upcoming           (Cairo clubs with millions of fans and 13 CAF Champions            This mandate appears not to have been adhered to however
                                                   developed deep social and cultural            period of anticipated protests.                League titles between them) have national prominence and           when in February this year, FIFA intervened to call for the
In common with other aspects of sport
                                                   relationships with their fans. Supporters                                                    the fans of both clubs have been significant actors in the         reinstatement of all Egyptian football club boards that had
in Egypt, the state plays a big role and                                                         Egyptian clubs themselves have
                                                   have always had a strong voice in Egypt                                                      ever-changing political landscape over the last few years.         been deposed by Sports Ministry officials, reiterating the
almost all clubs are tenants of govern-                                                          significant revenue generating ability.
                                                   and have the right to participate in the                                                     Politicians have long been drawn to sports clubs with such         position that Egypt’s government must not interfere with
ment-owned stadia. Zamalek does own                                                              In 2011, the newspaper Al Ahram was
                                                   running of community-owned clubs                                                             levels of influence and this is a status supported by the          internal football affairs. A letter sent by FIFA required Al
the Helmy Zamora Stadium which at                                                                reported to have agreed to pay EUR
                                                   through elections.                                                                           country’s 1975 Sports Law.                                         Ahly, Zamalek, Smouha, Ittihad of Alexandria, Tersana and
20,000 capacity is insufficient for match                                                        15m to Al Ahly over 3 seasons28. Also
                                                                                                                                                                                                                   Zohour to organise general assemblies to elect new boards
use but is still used as a training facility.      In his ‘Turbulent World of Middle             in 2011, Etisalat ousted rival Vodafone        This level of political influence is of course inconsistent with
                                                                                                                                                                                                                   “without interference from the authorities.”31 The letter also
Both Al Ahly and Zamalek own various               East Soccer’ blog, James M. Dorsey            to become Al Ahly’s new shirt sponsor          the rules of international sports and in November 2013, the
                                                                                                                                                                                                                   stipulated that the elections must not take place before the
club facilities for use by members.                documents the origins of both Al Ahly and     paying a reported US$22.6 million for the      International Olympic Committee (IOC) imposed a six-month
                                                                                                                                                                                                                   new sports law had been implemented in line with the IOC
                                                   Zamalek and also the rise of the ‘ultra’      three-year deal. Etisalat Egypt chairman,      deadline30 on Egypt to produce draft legislation updating
                                                                                                                                                                                                                   timetable. Until then, the clubs whose boards have been
                                                   fan groups which were formed in 2007 as       Gamal El-Sadat, told reporters at the          and revising the 1975 law to make it fully compatible with
                                                                                                                                                                                                                   disbanded must reinstall their former ones, FIFA specified.
SUPPORTERS                                         a non-political, non-religious group which    time “We are honoured to sponsor the           the basic standards of the Olympic Movement. As part of
                                                   became increasingly politicised following     shirt of such a big club, and have our         this revision process, the status of sports clubs in Egypt         Egypt’s new 2014 Constitution provides in Article 75 that
North African football in general has
                                                   regular police confrontations27”.             name associated with Ahly.”29                  was required to be reviewed and clarified. Completion of           “All citizens shall have the right to form non-governmental
proved much more resistant to the
                                                                                                                                                the whole process, including the formal adoption of the new        associations and foundations on democratic basis, which
influence of European football than the
                                                                                                                                                sports legislation by the competent authorities in the country,    shall acquire legal personality upon notification. Such
rest of the continent and Egypt is a clear
                                                   PREMIER LEAGUE                                CLUB LICENSING                                 was required within one year. In the meantime, the Egyptian        associations and foundations shall have the right to practice
example of this. Until the stadium ban of
                                                                                                                                                government was mandated not interfere in any manner                their activities freely, and administrative agencies may not
the last 2 years, attendances at Egyptian          Prior to the tragic events of 2012, the EPL   The EFA has approved national club
                                                                                                                                                whatsoever with the internal operations of the national            interfere in their affairs or dissolve. them, or dissolve their
games remained high at the community               was an undoubted commercial success.          licensing regulations and nominated the
                                                                                                                                                sports federations and the sports clubs, and the current           boards of directors or boards of trustees save by a court
                                                   Strong commercial and TV revenues             relevant decision-making bodies. EPL
                                                                                                                                                sports regulations/”standard statutes” issued by the Sports        judgment”.
                                                   combined with revenue from healthy            clubs have submitted their files to the EFA
                                                                                                                                                Ministry should not be implemented.
                                                   attendances enabled the biggest clubs to      for approval by the First Instance Body.
                                                   keep hold of their best players, keeping
                                                   the quality of the on-field product high
                                                   and fans coming to the stadia. The fact
                                                   that almost all of Egypt’s national team
                                                   played in Egypt (the reverse is usually       1.   The security of supporters at football
                                                   true for most African nations) was long            stadia should be a paramount
                                                   regarded as fundamental to their success           concern and Egyptian football
                                                   as they won three successive African               needs to be rebuilt around this.
                                                   Nations Cup titles from 2006-2010.                 Effective club licensing needs to be
                                                                                                      implemented to address this issue
                                                   Assisted by the country’s ability to
                                                                                                      as well as others linked to club
                                                   market its games to both Egyptian and
                                                   Arabic television networks, in 2011 the
                                                   EFA sold broadcasting rights for the EPL      2.   Over-politicization of community-
                                                   to Qatar-based Al Jazeera Sport for $2.6           owned clubs in breach of IOC
                                                   million, making it the first international         and FIFA regulations (please see
                                                   TV network to show the league. Egyptian            below). State-owned clubs are also
                                                   channels Modern Sport, Modern Kora,                inherently politically influenced.
                                                   Channel 2, Alhayat 2, Dream, Nile
                                                                                                 3.   A lack of formality in the registration
                                                   Sport, Almasriya, Channel 3 and Alahly
                                                                                                      of legal structures for each of the
                                                   TV have all shown matches from the
                                                                                                      three forms of ownership. This lack
                                                   domestic league.
                                                                                                      of formality contributes to a lack of
                                                   The spectator ban, however, created                transparency and accountability.
                                                   a financial crisis for the EPL. In April
                                                                                                 4.   Lack of supporter engagement by
                                                   2013, the EFA aimed to raise at least
                                                                                                      state and private clubs – absence
                                                   $17.3 million from auctioning off EPL
                                                                                                      of community roots and genuine
                                                   television broadcast rights for the next
                                                   three years. This auction was open to
                                                   Egyptian and foreign broadcasters, as
                                                   well as marketing companies. However,
                                                                                                 COMMUNITY-OWNED        CLUBS           AND
                                                   on 27 June 2013, the 2012/2013 season
                                                                                                 POLITICAL INTERFERENCE
                                                   was cancelled before the final round
                                                   when the Ministry of Interior announced       Egypt’s football clubs have proven to be
                                                   that it would be unable to secure local or    powerful and resilient social institutions.
                                                                                                 Al Ahly and Zamalek in particular

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