Deal or No Deal?

In June 2018, the Royal Dutch Football Association (KNVB) adopted new regulations to prevent undesirable investors from acquiring an interest in professional Dutch football clubs.[1] Around the same time, FC Den Bosch - a professional football club in the Dutch First Division, i.e. the national second-highest tier - was considering the transfer of almost all of its shares to Mr Kakhi Jordania (a Georgian businessman). The new regulations of the KNVB were therefore applicable to the intended share transfer of FC Den Bosch. The continuation of the deal was in serious jeopardy, which led to a long period of uncertainty for both parties. The contents of the new KNVB regulations, their effect and consequences on the aforementioned deal will be explained in this article.

[1] www.knvb.nl/nieuws/themas/financiele-integriteit/48616/nieuwe-regelgeving-bij-wijziging-zeggenschap-bvo%E2%80%99s

Introduction

On 24 July 2018, FC Den Bosch and Mr Jordania preliminarily agreed to a deal which would enable Mr Jordania to acquire over 99.9% of the club’s shares.[1] Mr Jordania made a new business plan which was created to put the club in a better structural position - both from a sporting, as well as from a financial, perspective. Up until June 2018, the aforementioned implementation of the business deal would not have been a problem, since the KNVB’s licensing committee could only examine takeovers retrospectively and without putting it in a position to deter any proposed takeover.

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