RIYADH: Private sports clubs in Saudi Arabia must now inform the Financial Market Authority before negotiating the sale of 5 percent or more of their capital to investors.
A new regulation from the Ministry of Sports mandates adherence to the Kingdom’s Companies Law, the Financial Market System, and guidelines from the Financial Market Authority for public listing.
The ministry emphasizes that this framework aims to enhance governance for private athletic clubs, boost competitiveness in local and international arenas, and create a favorable investment environment.
The draft regulation is available for public comment through the National Competitiveness Center until Nov. 20, giving stakeholders the opportunity to provide input on the proposed rules.
This initiative is in line with Saudi Arabia’s Vision 2030, which aims to diversify the economy and elevate the sports sector as a key area for private investment and job creation.
Vision 2030 places high importance on sports for social and economic development, driving substantial government efforts to improve infrastructure and attract international events.
The Ministry of Sports has made significant progress through programs like the Quality of Life initiative, which constructs sports facilities and promotes public fitness. Government investments have attracted global partnerships, featuring events like the Saudi Arabian Grand Prix and major golf tournaments, enhancing the Kingdom’s status as a global sports hub.
A private athletic club is defined as a sports company with independent legal status, established under the Companies Law and licensed by the ministry. These clubs are members of one or more sports federations and operate under the ministry’s oversight.
Their funding comes from service fees, match revenues, investment income, sponsorships, and broadcasting rights, all regulated by the ministry. Clubs can also engage in player transfers, loans, and accept donations. They can enter loan agreements, sell or mortgage assets, and manage debt under the Companies Law.
The regulations apply to all private sports clubs, including newly formed associations and existing organizations transitioning to companies. This new regulation supersedes the previous licensing framework and will be effective immediately upon ministerial approval.
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