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“The new challenge for football clubs – Club licensing is going live”

“The new challenge for football clubs – Club licensing is going live”

FIFA club licensing system

FIFA is aiming to create a global club licensing framework by the end of 2016, working with the six regional confederations to improve club football. To achieve this objective, FIFA will define minimum standards in key areas such as stadium safety, fan experience and youth football development. The FIFA club licensing principles will form the basis for the confederations’ own club licensing principles, taking into account the regional specificity of club football.

Essentially, this means that confederations will come up with their own specific frameworks based on FIFA’s minimum requirements. Clubs then need to meet these principles to be eligible for certain competitions, adhering to international statutes, investing in training facilities and agreeing to the independent auditing of finances and greater transparency of ownership.

The FIFA club licensing system requires clubs to commit to minimum standards and principles in five key areas:
1.Sporting criteria e.g. clubs must have a youth development programme; clubs must promote fair play
2.Infrastructure criteria e.g. clubs must have safe, comfortable stadiums for fans, families and media; clubs must have appropriate training facilities
3.Personnel and administrative criteria e.g. clubs must have qualified coaches and medical staff and professional, well-educated management
4.Legal criteria e.g. clubs must adhere to international statutes; club ownership must be transparent
5.Financial criteria e.g. independent auditing of club finances including financial statements and transparency of ownership

How does this impact clubs?

What does this mean for professional football clubs? In a nutshell, the proposed new club licensing system follows the same principles as any other Quality Management System. It defines principles and minimum requirements, ensures adherence to these requirements is regularly assessed and corrective action is taken where necessary.

Clubs will have to make an effort to ensure that they will comply with the minimum requirements FIFA and the confederations will define. If they fail to comply, there may be severe sanctions imposed on them such as exclusion from lucrative international competitions. Many clubs will probably need to engage with expert consultants who help them analyze their current operations and make amendments where necessary to comply with requirements.

Clubs also need to ensure more transparency when it comes to their operations and finances (key area No.5). Independent assessors will conduct reviews (“audits”) of clubs and they will need access to confidential information and supporting documents. One fundamental principle of auditing is that mere statements or promises are not enough to fulfill a requirement. Rather, supporting evidence is required to provide reasonable assurance that the requirement is fulfilled. This means that clubs need to ensure that they properly document their operations and finances and that this documentation is stored to be readily available for the auditors when they show up to do their assessment.

For many clubs, providing insight into the five key areas highlighted above will be a new experience in an industry which is traditionally secretive and not used to transparent reporting which has its roots in the business world.

Nevertheless, setting minimum requirements for professional football clubs is essential in times of negative press and scandals which have shocked the football community and it will eventually benefit clubs and provide a stronger foundation for global football.

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