The Sports Clubs Law prohibits the sale of private clubs. The transfer of ownership to third parties is limited to companies owning clubs of employees of institutions such as Enppi, Assiouti, Wadi Degla, and others.
Mohamed Fadlallah, a professor of sports legislation at the American University in the UAE, said that the law in Egypt prohibits the sale of teams of clubs in general, even after the new Sports Act.
He told Daily News Egypt that there are two types of clubs in Egypt, popular clubs, such as Al Ahly and Zamalek, and companies’ clubs, such as ENPPI and Petrojet.
He explained that in the first type of clubs, it is not permissible to sell them according to the law, since they are government clubs, while in the case of clubs belonging to companies, the sale is for companies, not for the club or sports teams.
He pointed out that clubs affiliated to companies were listed according to the Sports Corporations Law, which means that they are also subordinate to the state and cannot be sold until after the approval of the Board of Directors and the competent administrative authority in accordance with Article 2 of the Consolidated Financial Regulations, as they are considered joint stock companies unlike government companies that the law prohibits transferring into joint stock, based on Article 23.
He said that popular clubs can benefit from establishing companies and have a stake of 51%, so that they cannot be sold or acquired.
He called for allowing individual ownership of clubs that exercise sports activities and setting necessary rules and regulations, in contrast to the current law, which requires at least 100 members of the club to ensure the rights of members of existing clubs.
The new Sports Act requires that the composition of the club of 100 members, at least, which hinders investment in sports activities for-profit activity such as football for example, according to Fadlallah.
He said that the law was rushed and the investment part was not clear enough.
He added that the new law allows for the establishment of clubs, but any new football club will be bound to start the competition in the fourth division, which will push investors to buy companies’ clubs instead and buy the entire company to cut time, similar to the Pyramids deal.
Moreover, Fadlallah warned about the future of selling companies’ clubs without changes that give popular clubs an equal opportunity, whereby, he pointed out that clubs for corporations can be invested in, while popular clubs do not have the same potential, with major obstacles facing investors.
He said that the Egyptian Football Federation (EFF) must intervene and draw up regulations on transfers, prices and salaries, which happens in the UAE and Saudi Arabia, and that the EFF cannot leave the transfer process to occur in this form without interference, as it leads to a lack of control over the players and the market.