Commercialisation of sports facilities – the way to go?

Preamble – existing facilities

Sport is a sector that seems to be booming in Malta and the recent white paper regarding the commercialisation of sports facilities has set the ball rolling with regards to the various possibilities that the said areas can enjoy. First and foremost it has to be said that there are alraedy a number of facilities that are quasi self sufficient. These include the four main stadia in Malta, the National Stadium and Centenary Stadium at Ta’ Qali, the Victor Tedesco Stadium in Hamrun (property of Hamrun Spartans FC) and the Hibernians Stadium in Corradino (property of Hibernians FC). Other grounds that are the property of respective clubs include the Charles Abela Stadium in Mosta, the Luxol Stadium in St Andrew’s and the Sirens Stadium in St Paul’s Bay – these are also quite good revenue earners for their respective clubs. Apart from football one can also mention the National Pool Complex at tal Qroqq which is owned by Sport Malta and the Corradino National Pavilion where games such as basketball and volleyball are played. The National Pavilion at Ta’ qali is another facility which is dedicated almost solely to basketball.

The White paper – an introduction

In its opening statement the white paper states: “Since 1997, the Government has identified a system that permits the transfer of public land to sports organisations for the practice of their sporting disciplines by parliamentary resolution. This system was regularised in 2002, with the advent of the Sports Act (Chapter 422 of the Laws of Malta). The law stipulated that government-owned land could be passed to sports organisations registered with SportMalta through some form of legal title”. Several associations have benefited from this law and these include sports associations such as the Malta Racing Club, the Malta Shooting Club, the Malta Horse Racing Federation etc, and not just football clubs.

Most of the land has been conceded by two types of title: a. Temporary emphytheusis for a period of 49 years; b. Lease for a period of 16 years, renewable for another two terms (48 years) This system enables a registered sports organisation to make a request to SportMalta for land identified by that same organisation. After verifications would have been confirmed, such as clarifying the title of the land and ascertaining that such land was indeed public, SportMalta would request such land from the Lands Department so that this would be transferred to the relative sports organisation.

The white paper is proposing that:

by virtue of the publication of a legal notice under the Sports Act this will allow sports organisations to either:

  1. Conduct their commercial activities within their properties; or
  2. Lease their land to third parties for the generation of commercial activity under sub-lease agreements (operations agreement); or
  3. Enter into partnerships with third parties for the generation of commercial activities in a system of expense and profit sharing.

This legal notice is to contain regulations that would permit sports organisations to carry out economic activity on lands administered by them. At the same time, however, the notice would also establish controls that confirm the preservation of the property’s origins and nature as a sports facility.

As a case example, the white paper is proposing that a football club would be allowed to build shops and offices and/or garages to maximise the revenue of the wole footprint of the land. Obviously this has to be done according to the relevant development permits being acquired and that the main scope of the sporting activity (in this case, football) is to be retained.

Therefore, the legal notice is to establish:

  1. The type of commercial activity that may be conducted on such land;
  2. The type of investor who may be approved to offer financial backing of such facilities;
  3. The monitoring and enforcement procedures to be enacted so as prevent the misuse of such facilities;
  4. The procedure that allows commercial activity to be conducted by a sports organisation in its facilities; and
  5. A regulator that will approve projects for the commercialisation of sports facilities, and be tasked with control of the legal notices as well as contractual obligations by the sports organisation.

In the second part of this article we shall be analysing each point in further detail.