New legal framework seeks to enhance governance RIYADH: Saudi Arabia’s private sports clubs are now required to notify 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 compliance with the Kingdom’s Companies Law, the Financial Market System, and guidelines from the Financial Market Authority for public listing. The ministry states that this framework aims to strengthen governance for private athletic clubs, improve competitiveness in local and international arenas, and foster an appealing investment environment. The draft regulation is open for public feedback via the National Competitiveness Center until Nov. 20, allowing stakeholders to weigh in on the proposed rules. This initiative aligns with Saudi Arabia’s Vision 2030, which seeks to diversify the economy and elevate the sports sector as a vital area for private investment and job creation. FASTFACTS - 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. - The draft regulation is open for public feedback via the National Competitiveness Center until Nov. 20, allowing stakeholders to weigh in on the proposed rules. Vision 2030 prioritizes sports as crucial for social and economic development, driving significant government initiatives to improve infrastructure and attract international events. The Ministry of Sports has made notable strides through programs like the Quality of Life initiative, which builds 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, 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 replaces the previous licensing framework and will take effect immediately upon ministerial approval.