Analysis of white paper on commercialisation of sports facilities – 2

In the first article we analysed the main points that are present in the white paper on the commercialisation of sports facilities. We shall now go into further detail on the main points in this document.

The type of activity to be conducted on such land:

Under the proposed legislation, most types of commercial activity would be allowed to be conducted. However, since sports facilities are there primarily to be used by and for the education of children, no immoral activity or gambling is to be permitted. The legal notice shall completely exclude the opening of commercial outlets such as nightclubs, lotto receivers, gambling shops etc. Together with the above, the construction of residential units on land leased for sport purposes shall also not be authorized. The objective behind the concept of commercialisation is to aid sports organisations boost their income for financial sustainability. However, hostels (but not hotels) that serve a housing purpose for those teams or athletes who wish to hold training camps in Malta and Gozo are to be approved; this is because promoting and using Maltese sports facilities as international training camps may be a good source of income for the sports organisation running the facility. In order to verify that the commercialisation objectives of the sports facilities are met, it is proposed that the legal notice incorporates clauses that prohibit land speculation from occurring.

Type of investor for the sports facilities:

The aim of the proposed legislation will be to provide a legal tool that will enable Maltese sports organisations to develop their facilities, both from a purely sporting angle as well as from a commercial perspective, consequently assisting these organisations in becoming financially self-sustainable. Therefore, there is sensitivity to the issue that most sports organisations would want to exploit their sports facility commercially but lack the financial resources to carry out the investment needed.

To this end, the proposed legislation will authorize third-party investors and/or partners to fund projects of this nature. On the other hand, a sports organisation that has the means and capacity to execute infrastructural works as required, and can do this without external financing, will still be entitled to operate in this way. However, safeguards are to be applied before accepting an investment for a particular project. Obviously, this process involves running appropriate and rigorous due-diligence exercises to guarantee that sports organisations would not be used as vehicles for money laundering or other illicit businesses.

Control, enforcement and regulation:

It is of huge importance to protect the public land granted by the State to sports organisations. Therefore, the commercialisation of sports facilities should not occur within a lax framework where everything is allowed. A regulatory body must be established and this should be granted powers to approve projects for commercialisation and to monitor the implementation of such projects. Consequently, this body would oversee that the targets set out in this White Paper are achieved. The proposed legislation should establish a regulator that would be tasked with working towards the commercialisation of sports facilities by being empowered to: approve sports-facility commercialisation projects following advice from a purposely set-up technical committee, monitor the implementation of the approved project; monitor the operation of the economic activity following the termination of the infrastructural project; and monitor the sports organisation’s financial reports and those involving any commercial partnerships, as may be required.

It is being proposed that upon the receipt of an application for a commercial project within a sports facility, a technical committee should be formed to analyse and advise the Regulator on whether to approve or deny applications for the commercialisation of such a facility. The technical committee is to be composed of persons who have a proven track record in and familiarity with the administration of Maltese sports organisations.

The ultimate aim of commercialisation will be to provide sports organisations with the income required to make them financially self-sustainable and to have sufficient resources that would in turn enable them to invest in superior training structures. For these reasons, it is of paramount importance that thorough monitoring controls are carried out so that the declared financial targets in the approved projects are met.