Evaluation of the Legal Position of Sports Club Joint Stock Companies

In Turkey, football clubs started to become companies in the 1990s. Increases in broadcast revenues, sponsorship revenues and logo product sales increased clubs' revenues, while club expenses also increased with the increase in transfer fees. The mentioned facts made it necessary for Turkish football clubs to become companies in order to professionally manage their income-expenditure balance.

Concept of Partnership and Company

The dictionary meaning of the word partnership or company, which expresses the gathering of people around a goal, is very comprehensive, but in legal terminology, the concepts of company or association refer to groups of people consciously united around a purpose. Companies that carry out sports activities as the subject of business have been called "sports joint stock companies" and have been subject to special provisions.

This special legal order leads to the positioning of the sports joint stock company as a form, a type of joint stock companies. See, according to Article 14 of SKSFK, joint stock companies established according to Law No. 6102 and acquiring legal personality gain the status of sports joint stock company with their registration by the Ministry.

Definition of Sports Joint Stock Company

A sports joint stock company, according to Article 2 of SKSFK, is a joint stock company established according to TCC No. 6102 as a subsidiary or affiliate of a sports club or independently of a sports club and registered with the Ministry for the purpose of engaging in sports activities. Within the framework of this definition, for a sports joint stock company to exist, first of all, the existence of a joint stock company established according to TCC and registered in the commercial registry is required.

Characteristic Features

It is not very possible to speak of characteristic features that will distinguish the sports joint stock company from other forms of joint stock companies. However, it is mandatory that the company that will carry out sports activities be established as a joint stock company; thus, a sports joint stock company is necessarily a type of joint stock company.

Since the sports joint stock company carries out sports activities, although its establishment is not subject to permission, its engagement in activities is subject to permission. In the registration system, the conditions necessary for acquiring legal personality must be fulfilled. That is, as in associations, the free establishment system has been eliminated and a system dependent on constitutive registration has been introduced.

Special Regulations

It is a joint stock company whose commercial enterprise carries out sports activities and the transfer of this enterprise is subject to special rules and at the same time is subject to some special limitations on the budget. In addition, the company can engage in activities for economic purposes and subjects outside of sports activities. However, for a joint stock company to be able to gain the status of sports joint stock company registered by the Ministry, there must necessarily be a motive for engaging in sports activities.

Mandatory Nature of Joint Stock Company

The legislator has mandatorily determined the joint stock company while structuring and organizing the sports company. Because sports activity forms an area that requires higher sponsorships every day, feeds many economic branches around it, and is positioned as one of the priority areas of influence of politics.

Even just the facts mentioned require the most comprehensive supervision of joint stock companies engaged in sports activities with the opportunities provided by modern law. Among partnership types, the only type suitable for corporate governance, in this sense above all for accountability and transparency, is the joint stock company.

Here, essentially, the sports activity discussed is football activity. However, in cases where the contrary is not stipulated, it is possible to carry out sports activities not through a sports joint stock company but also through a sports club.

Establishment as a Commercial Partnership

In case the persons who will carry out sports activities move towards establishing a commercial partnership depending on the scope of the activity, the commercial partnership through which this activity will be carried out is now a sports joint stock company. In practice, in cases where there are no provisions in SKSFK, general provisions, primarily the Turkish Commercial Code No. 6102 and related legislation, find application.

Publicly Held Sports Joint Stock Companies

On the other hand, according to Article 1/3 under the heading of Purpose of SKSFK, it is stated that all publicly held sports joint stock companies, including sports joint stock companies whose shares are traded on the stock exchange, are subject to capital markets legislation. The provisions introduced for sports joint stock companies in this law are applied to the extent that they do not differ from the regulations introduced by capital markets legislation for publicly held companies.

In case there are different provisions on the same subject, the provisions of capital markets legislation find application for publicly held sports joint stock companies. According to this regulation, the provisions of SKSFK regarding sports joint stock companies in the position of publicly held joint stock companies will find application to the extent that they do not conflict with SPK No. 6362 and related legislation.

Conclusion

Sports joint stock companies occupy a special position in the Turkish legal system as joint stock companies. The joint stock company structure has been made mandatory for the professional conduct of sports activities, ensuring the income-expenditure balance and implementing the principle of transparency. These companies are subject to both the Turkish Commercial Code and the Law on Sports Clubs and Sports Federations, and for publicly held ones, capital markets legislation is also applied.