In recent weeks, there have been a number of sensational news reports in the media about the applications for a football license by the clubs in First Class A and First Class B. Questions were raised about, among other things, the sales structure of KV Oostende – whereby the effective takeover amount would be paid deferred – and whether this would be permitted by the licensing committee.
However, any explanation about the precise procedure for obtaining such a license is lacking or is characterized by incompleteness.
However, this interpretation provides interesting insights.
1) The procedure and application for obtaining a license
The procedure for obtaining a license is determined in articles P401 to P429 of the Federal Regulations of the KBVB.
To participate in First Division A or First Division B, a club must have “a license from a club in division 1A of professional football”, respectively “a license from a club in division 1B of professional football”. From the 2018-2019 season, clubs that drop to First Division B or that remain in First Division B for the coming year will also be required to have “a license from a club in division 1A of professional football”.
The licenses must be issued in accordance with art. P417 Federal regulations must be requested by registered letter between February 1 and February 15 prior to the new season. The licensing committee draws up a standard form for these applications, on which all conditions and required supporting documents and certificates are indicated.
If a club wishes to participate in a European competition, this club must also have a European license.
2) The conditions that the clubs must meet
With regard to the conditions that must be met by the clubs, Article P406 of the Federal Regulations is central.
Article P406 of the Federal Regulations stipulates as the conditions for awarding that the clubs (1) must indicate the responsible legal entity(ies); (2) must demonstrate that continuity is assured; (3) must comply with article P407 Federal Regulations; and (4) must comply with article P408 Federal Regulations for clubs in 1A and article P410 Federal Regulations for clubs in 1B.
In practice, it is initially checked whether the clubs comply with articles P408 or P410 of the Federal Regulations and with art. P407 Federal regulations.
Only if this is met – it is a necessary condition – will it be investigated – based on, among other things, accounting data, statements from creditors and statements from financiers – whether continuity is assured.
It is important to note that a license can never be granted under conditions.
Articles P408/P410 Federal Regulations – depending on whether the club participates in 1A or 1B – concern more technical requirements such as meeting the various criteria that the stadium, playing field, lighting, etc. must meet. In practice, these articles lead to little discussion.
Article P407 of the Federal Regulations – which sets out an extensive set of general terms and conditions for all clubs – is the biggest stumbling block for most clubs that do not obtain a license.
Conditions that regularly lead to discussion include:
- Art. 407.1.4°: the submission of an audit report by an appointed auditor for the last closed financial year that complies with all relevant legal provisions;
- Art. 407.1.5°: an estimated statement of receipts and expenditure until the end of the season for which the license is requested (loans and guarantees for which the creditor may demand repayment before the end of the season may not be taken into account);
- Art. 407.1.6°: provide proof that there is no default in the payment of, among other things, wages to players, trainers and all staff and the amounts owed to R.S.Z. sums owed (the Licensing Commission requires indisputable supporting documents such as, for example, a payment plan based on the RSZ or proof of payment of wages).
With regard to the condition included in art. 407.1.6° relating to the club’s debts, the Federal Regulations allow a license to be granted if the relevant debts are disputed and the dispute does not appear to be manifestly unreasonable. Where appropriate, the granting of the license may be made dependent on the club blocking the disputed amounts.
Article P407 of the Federal Regulations also stipulates that a license will not be granted to a club of which one or more affiliated legal entities are also affiliated with another club in professional football. The article then defines what constitutes a related legal entity.
An affiliated legal entity is, among other things, the party that directly or indirectly has 10% or more of the voting rights in the general meeting of the license candidate or that in one way or another exercises a significant influence on the license candidate; and/or the party having the authority, in fact or in law, to appoint the management committee or the representatives of the club to the Pro League.
Given the wording “that one a significant influence in one way or another exerts on the license candidate” and ” in fact or in law” the question may be asked whether the construction of KV Oostende outlined by the media cannot be understood below. In this case, a problem could certainly arise for both KV Oostende and RSCA Anderlecht.
3) Intervening creditors
Also important is article P418 of the Federal Regulations, which states that creditors of clubs who submit an application and believe that they should be taken into account when granting a license can make themselves known to the KBVB. Where appropriate, the Licensing Commission may take the fault of this creditor into account when deciding whether to grant the license.
Mr Eddy WAUTERS, former chairman of RAFC Antwerp, among others, has made use of this option several times.
4) The decision
After hearing the License Manager’s report, the Licensing Committee will rule on the club’s application.
Or the Licensing Committee – if all conditions are met – immediately awards the license and the applicant club does not have to appear before the Licensing Committee.
If the Licensing Committee cannot grant the license, it will request additional documents. After submitting these documents, the club must then appear to explain everything at a meeting of the Licensing Committee. On this basis, the Licensing Committee decides whether or not the license can be granted. This decision must be communicated to the club with proper reasons.
Article P419 of the Federal Regulations stipulates that a decision on all license applications must be made in the first instance before April 15 prior to the new season.
5) The sanction if a license is not obtained
Every club that wishes to play in professional football 1A or 1B must be the holder of the aforementioned license.
If a license is refused or no license has been applied for, the club will be relegated to 1st Class Amateurs, insofar as it meets the license conditions for 1st Class Amateurs. Furthermore, if the license is refused or revoked because the club does not meet the conditions imposed in Art. P407.1.6° then the club must start the championship in 2nd class amateurs with a handicap of three points.
6) Right of redress before the Belgian Court of Arbitration for Sport
Within three days after notification of the decision, the club can appeal to the Belgian Court of Arbitration for Sport (BAS).
The Federal Public Prosecutor’s Office of the KBVB or a third party interested club can also appeal against the decision to grant the license.
The BAS must then make a decision no later than May 10 prior to the new season.
An essential aspect of this appeal procedure is that the BAS takes up the case in its entirety – this means the facts, the documents and the legal arguments – and that it has full jurisdiction. The BAS may take new payments or agreements into account.
In concrete terms, this means that even if the Licensing Committee decides not to grant the license because certain debts have not been paid, the BAS can still grant the license if the club subsequently pays these debts.
The club is, as it were, given a second chance (and a little more time) to meet the conditions.
RAFC Antwerp, among others, has now used this option several times and successfully.