Commercialisation of Sports Facilities

L.N. 213 of 2022

SPORTS ACT

(CAP. 455)

Commercialisation of Sports Facilities

(Amendment) Regulations, 2022

IN EXERCISE of the powers conferred by article 53 of the

Sports Act, the Minister responsible for Sports, after consultation with

SportMalta, has made the following regulations:-

The title of these regulations is the Commercialisation of Citation.

Sports Facilities (Amendment) Regulations, 2022 and these

regulations shall be read and construed as one with the

Commercialisation of Sports Facilities Regulations, hereinafter S.L. 455.12.

referred to as "the principal regulations".

Regulation 2 of the principal regulation shall be amended Amends

as follows

(a) the definition "commercial activity" thereof shall be

substituted by the following new definition

" "commercial activity" means that activity within

the commercial area which shall be used for the

construction and operation of buildings for commercial

activity by the sports organisation, that is offices, retail

units,

shopping

malls,

supermarkets,

catering

establishments (for use at any time of the day according

to the relative licence), language schools, childcare

centres, and any parking spaces that are in excess of the

car-parking provisions according to the policies of the

Planning Authority required for the operation of such

buildings

Provided that the Commission may approve

any other sui generis commercial use, with the exclusion

of nightclubs, gaming parlours, class 3B hotels, and

residential units, and any other commercial activity

which the Commission deems not fit to be found within a

sports facility;";

(b) immediately after the definition "SportMalta" thereof

there shall be added the following new definitions

" "sports activity" means that part of the sports area

which shall be solely used for the actual practice of a

sporting discipline by the sports organisation, that is indoor

or outdoor, single or multi-use pitches and courts, indoor or

outdoor swimming pools and gymnasiums;

"sports ancillary activity" means that part of the

sports area which shall be used for the construction and

operation of buildings that form an integral part of the

operation and the achievement of the sporting objectives of

the sports organisation, that is spectator stands, dressing

rooms,

warm-up

areas,

clubhouses

(including

administrative offices, meeting and conference rooms,

catering facilities to be used during sports events only,

lounges, media areas, sports museums and e-sports arenas),

sports academies, high performance training centres,

medical and health facilities (including recovery centres,

medical centres and physical rehabilitation centres), spas

and personal care centres, class 3A hostels, and necessary

parking spaces according to policies of the Planning

Authority required for the operation of such buildings;";

and

(c)

the definition "sports area" thereof shall be

substituted by the following new definition

" "sports area" means the designated area of the

sports facility which shall be used exclusively for the sports

activity and the sports ancillary activity for which the

sports organisation is registered with SportMalta;".

Sub-regulation (1) of regulation 3 of the principal

regulations shall be substituted by the following new sub-regulation

"(1) There is hereby established a Commission to be

known as the Commercial Sports Facilities Commission, which

shall have a legal personality, and shall consist of a Chairperson

and a minimum of three (3) and a maximum of five (5) other

members nominated by the Minister from which at least one (1)

member shall have expertise in the field of sport administration

in Malta.".

Regulation 4 of the principal regulations shall be

substituted by the following new regulation

4. (1) A sports organisation shall apply to the

Commission in order to be able to carry out commercial

activity in a sports facility. A sports organisation may

carry out commercial activity solely upon being granted

a permit by the Commission, following the submission of

an application in accordance with sub-regulation (2)

Provided that a sports organisation which

intends to carry out a commercial activity as defined in

these regulations, which commercial activity does not

take up more than a total floorspace of two hundred

square metres (200sqm), shall apply for the carrying out

of such commercial activity with SportMalta after

notifying the commission and, following clearance by

the said commission for the processing of the

application, Sport Malta shall adopt its own policies and

procedures on how to deal with and approve such

applications.

(2) The application for the commercialisation of

a sports facility shall, on pain of nullity, contain the

following

(a) the name, registration number as a

sports person and official address of the applicant;

(b) a list of all committee members of the

sports organisation, with clear indication as to the

responsibility held by each committee member;

(c) a signed declaration as to who are the

legal representatives of the sports organisation;

(d) a detailed written explanation of the

type of commercial activity proposed to be carried

out within the sports facility by the applicant;

(e) a plan made by a perit that identifies the

area of the sports facility that shall be used as the

sports area and the commercial area, with a

declaration on what will be the number of square

metres which shall be used as the sports area and

the commercial area respectively, that contains all

necessary designs and plans on how the sports

facility is going to be structured, including both

commercial and sports areas. The proposed sports

area shall never be less in size than the area which

is currently being used exclusively for the practice

of the sporting discipline for which the sports

organisation is registered with SportMalta;

(f) a signed declaration on the estimated

time for the completion of any infrastructural

works that are to be carried out in the sports facility

prior to the start of the commercial activity;

(g) a sworn declaration made by the legal

representatives of the sports organisation

confirming that the application is being made by

the sports organisation according to these

regulations and that the sports organisation is

aware of and understands all its rights and

obligations according to these regulations.

(3) Upon receipt of an application by a sports

organisation, the Commission shall verify and confirm

that the application is complete, and upon such

confirmation forward a copy of such application and all

attached documents to the Lands Authority for the

valuation of the land according to regulation 6.

(4) The sports organisation, upon receipt of the

official documentation by the Commission from the

Lands Authority containing the valuation of the land,

shall submit the following documentation following an

request by the Commission

(a) a business plan that explains in detail

the expense estimated in order to start the

commercial activity within the sports facility, how

such estimated expense will be financed, plans for

the repayment of the expenses, the estimated

revenue that will be generated by the commercial

activity and a detailed explanation on how the

sports organisation will benefit, from a sporting

perspective, from the commercial activity;

(b) an authenticated copy of any contract

made with a third-party operator according to

regulation 7;

(c) all documents proving that all natural

persons forming part of the committee of the sports

organisation and all natural persons being the

members, directors, shareholders and, or ultimate

beneficial owners of any third-party operator,

which can be both a natural person or a legal

person, that has entered into a development and

management

agreement

with

the

sports

organisation according to regulation 7 fulfil the

criteria set out in regulation 7(3).

(5) After receiving the documentation from the

sports organisation according to sub-regulation (4), the

Commission shall appoint a Technical Committee, which

shall have the following duties

(a) to evaluate the application and carry out

all the necessary work to assess whether the

estimates, plans and designs presented should lead

to the infrastructural, financial and sporting growth

of the sports organisation and to verify that time-

frames proposed are realistic;

(b) to provide advice to the applicant on

any amendments to be made to the application for

the purpose of improving it;

(c) to evaluate whether the sports

organisation, or a proposed third-party operator,

are financially capable to start the commercial

activity and whether they are financially viable to

manage and sustain a prolonged commercial

operation;

(d) to present a final report to the

Commission at the end of the evaluation process

containing detailed reasons as to whether the

Commission should accept or refuse the

application and setting out all the conditions under

which the sports facility is to be commercialised.

(6) A Technical Committee shall be formed every

time the Commission receives an application by a sports

organisation. When an application is presented by a

national association or federation, the Technical

Committee shall be appointed by the Commission,

whereas when an application is presented by a club, the

Commission shall instruct the national association or

federation in which such club is a member to appoint two

(2) persons to the Technical Committee, whereas the

Commission shall appoint an advocate, perit and an

accountant to the Technical Committee.

(7) Upon receipt of the final report from the

Technical Committee, the Commission shall, if it is

convinced that the commercial activity proposed by the

sports organisation in the application will lead to the

infrastructural, financial and sporting growth of the

sports organisation, issue a certificate to the sports

organisation granting it permission to commercialise the

sports facility according to the conditions set out in the

final report

Provided that the Commission shall not be

bound to abide by the conclusions of the Technical

Committee against its own conviction, and may reject in

whole or in part any recommendation of the Technical

Committee

Provided further that in its decision the

Commission may impose any condition it feels

appropriate on any third-party operator participating in

the project of the sports organisation.

(8) Should the Commission, after receiving the

final report from the Technical Committee, refuse the

application, the sports organisation shall have the right to

appeal the decision of the Commission to the Appeals

Panel within seven (7) days from the notification of the

reasoned decision for refusal of the application.

(9) When in receipt of an appeal from a decision

of the Commission by a sports organisation, the Appeals

Panel shall convene one (1) hearing, not later than thirty

(30) days from the receipt of the appeal, in order to hear

the appellant sports organisation and the Commission.

(10) The Appeals Panel shall notify its motivated

decision on the appeal to the parties within fifteen (15)

days from the last hearing of the appeal.

(11) The decision of the Appeals Panel shall be

final and absolute.

(12) The Commission shall notify SportMalta of

all permissions granted by the Commission, in the first

instance, or the Appeals Panel, following an appeal, and

shall forward all documentation to SportMalta.".

Regulation 5 of the principal regulations shall be

substituted by the following new regulation

" New contract

5. (1) Upon being notified by the Commission

that

permission

has been granted to a sports organisation

for the commercialisation of a sports facility, and the

documents related to the case are received, SportMalta

and the sports organisation shall draw up a public deed

for the concession of the same sports facility to the sports

organisation. The Commission shall also appear on the

public deed limitedly to declare its approval to the

publication of the said public deed.

(2) The said public deed shall, apart from the

formalities prescribed by law for all public deeds, include

the following

(a) the new term for the temporary

emphyteusis which shall never exceed sixty-five

(65) years from the date of the original deed;

(b) a declaration as to the total footprint in

square metres of the sports facility;

(c) a declaration as to the ground rent to be

paid in respect of the sports area and the

commercial area by the sports organisation to

SportMalta;

(d) a declaration stating that the designated

sports area shall be used exclusively for the practice

of the sporting discipline for which the sports

organisation is registered with SportMalta, whereas

the designated commercial area shall be used

exclusively for the operation of the commercial

activity within the sports facility;

(e) a declaration as to the precise footprint

in square metres of the minimum designated sports

area and the maximum designated commercial area;

(f) the establishment of any terms of

payment to be made to SportMalta by the sports

organisation for the designated sports area and for

the designated commercial area;

(g) a declaration as to the identity of the

third-party operator which has been approved by

the Commission to develop and, or manage the

commercial activity in the sports facility, with the

relevant contract submitted with the application to

the Commission being annexed to the public deed;

(h) any recommendation that the Technical

Committee has made in its final report;

(i) an attached site-plan which clearly

indicates which part of the sports facility shall be

used as the sports area and which part shall be used

as the commercial area;

(j) a declaration stating that the sports

organisation, and the third-party operator, if any,

recognise and are bound by these regulations and

shall forward all necessary documentation

requested by SportMalta for monitoring purposes

and be liable to the administrative penalties

prescribed by regulation 9 should it, or the third-

party operator be in breach of contract or of these

regulations.

(3) Any public deed concluded for the purposes

of these regulations shall include a condition to the effect

that the conditions stipulated in these regulations shall

form an integral part of and shall bind the parties to the

public deed.

(4) Any public deed concluded for the purposes

of these regulations shall require approval by special

resolution of the House of Representatives in terms of

article 31 of the Government Lands Act.".

Regulation 6 of the principal regulations shall be

substituted by the following new regulation

6. (1) The freehold value of the footprint of

the land over which the sports organisation intends to

carry out the proposed development as approved by the

Commission, and the resultant annual ground rents on

both the areas designated for sports and commercial

activities, shall be determined by the Lands Authority.

(2) The freehold value shall be equivalent to the

difference between the estimated value of the land with

its full development potential in accordance with the

submitted project, and the value of the improvements

made thereon by the same sports organisation throughout

the years it has been administering the sports facility.

(3) The annual ground rent for the granting of an

emphyteutical concession for a period of not more than

sixty-five (65) years over the floorspace of the area

designated for sports activity and the related sports

ancillary activities, which estimate shall correspond to

four-point two five percent of the freehold value

determined in sub-regulation (2). A share of five per cent

(5%) of the resultant ground rent according to the

provisions of this sub-regulation shall be payable to

SportMalta.

(4) The annual ground rent for the granting of an

emphyteutical concession for a period of not more than

sixty-five (65) years over the floorspace of the area

designated for commercial activity, which estimate shall

correspond to five point seven five per cent (5.75%) of

the freehold value determined in sub-regulation (2). A

share of fifty per cent (50%) of the resultant ground rent

in accordance with the provisions of this sub-regulation

shall be payable to SportMalta.

(5) Payment of the five per cent (5%) share of the

annual ground rent by the sports organisation for the

areas designated for sports activity and the related sports

ancillary activity shall become due upon the publication

of the public deed according to regulation 5

Provided that the fifty per cent (50%) share of

the annual ground rent on the areas designated for

commercial activity shall become due as from the first

day in which the operation of the commercial activity

begins

Provided further that if the commercial

activity does not start within five (5) years from the

publication of the public deed according to regulation 5,

the authorisation for the commercialisation of the sport

facility shall not apply anymore and the public deed in

respect thereof shall be rescinded at the request of

SportMalta.

(6) Should the commercial activity approved by

the Commission require infrastructural works for the start

of the operation of that commercial activity, then all

necessary development permits according to law are to be

obtained by the sports organisation prior to the carrying

out of such infrastructural works.".

Regulation 7 of the principal regulations shall be amended Amends

as follows

(a)

sub-regulation (1) thereof shall be substituted by the

following new sub-regulation

"(1) A sports organisation applying for permission

to carry out commercial activity in accordance with these

regulations, may enter into a contract with a third-party

operator for the development and, or the management of

the commercial activity within the sports facility,

following the publication of a public request for

proposals by the sports organisation, according to

guidelines established by the Commission, from time to

time

Provided that the request for proposals shall

be published by the sports organisation upon attaining the

approval to publish such request for proposals by the

Commission.";

(b) sub-regulation (4) thereof shall be substituted by the

following new sub-regulation

"(4) A third-party operator shall not be recognised

by the Commission unless the contract between the sports

organisation and the third-party operator, according to sub-

regulation (1) is filed with the Commission, following the

publication and adjudication of the request for proposals,

and the Commission has declared that the process of the

adjudication of the request for proposals has been carried

out correctly."; and

(c) sub-regulation (5) thereof shall be substituted by the

following new sub-regulation

"(5) The sports organisation shall be responsible to

collect all necessary documentation to prove to the

Commission that the owners, members, directors and, or

ultimate beneficial owners of the third-party operator are

not undesirable persons after a due diligence assessment

has been carried out in relation thereto.".

Regulation 12 of the principal regulations shall be

substituted by the following new regulation

(1) The Commission may, from time to time,

commentaries

and guidelines. issue

commentaries implementing procedures and

guidelines.

(2) Guidelines issued by the Commission shall be

considered as an integral part of these regulations.".

€0.90