DEBT RESTRUCTURING OF ITALIAN FOOTBALL CLUBS

Although association football is the world’s most popular and lucrative sport, the beautiful game, at all levels, faces financial pressures and challenges in many parts of the world in the present economic times.

This is also true of Italian football and clubs, even top-tier ones, such as Inter Milan, due to a number of reasons, including infrastructural ones, such as the lack of investments in new stadiums and difficulties in attracting long-term investors.

To deal with such financial issues, the Italian Football Association (FIGC), on 19 April 2023, amended its Internal Organisational Regulations (NOIF) to facilitate the adoption by clubs of debt restructuring procedures, in accordance with the new Legislative Decree No 14/2019 on Corporate Crisis and Insolvency (CCII), with the object of safeguarding national competitions and allowing business continuity of clubs facing these issues.

Before these amendments were passed, the affiliation of an Italian football club with the FIGC could be revoked in the event of bankruptcy and winding-up procedures, pursuant to the provisions of Article 16.6 of the FIGC NOIF.

But now, pursuant to the new provisions of Article 16, Italian football clubs may choose between multiple debt restructuring procedures under the CCII, for example, debt restructuring agreements, compositions with creditors, restructuring and reorganisation plans, and private settlement agreements, in order to ensure business continuity of the clubs and a reduction and/or rescheduling of their outstanding financial liabilities.

In December 2023, the FIGC decided to make further amendments to the NOIF, with a view to introducing stricter consequences for clubs entering into debt restructuring arrangements and discouraging them from piggybacking on debt restructuring arrangements, in order to evade their outstanding financial obligations.

In particular, with effect from 1 July 2024, clubs entering into debt restructuring arrangements will be subject to a ban on registering new players.

Clubs entering into debt restructuring procedures are required to inform FIGC and the national authority monitoring compliance of financial obligations by football clubs (Co.Vi.So.C.) by filing a business plan, certified by a qualified expert, confirming the club’s ability to operate, at least, until the end of the football season, as well as a copy of the petition made to the competent court to access the restructuring arrangements.

Any final decision of the court authorising repayment plans, debt reductions and waivers must be submitted to the FIGC and Co.Vi.So.C., and clubs will remain subject to all the obligations prescribed by the FIGC regulations, until the court decision approving the restructuring arrangements becomes final.

As will be appreciated, these regulations on debt restructuring arrangements are rather technical and complex requiring professional advice and assistance in order to carry them out effectively and legally.

We advise Italian football clubs on debt restructuring arrangements and further information is available from Avv. Sara Botti, the Head of our Italian Law Desk, by emailing her at ‘botti@valloni.ch’.