The Tel Aviv District Court has ruled that the Israeli Football Association must compel football clubs to publish financial statements.
On Monday, September 11th, the Tel Aviv District Court, under the authority of the Honorable Judge Einat Ravid, obliged the Israeli FA to comply with its ruling and require football clubs to operate in transparency. In effect, the decision means clubs will be required to publish their financial statements including full information, audit reports and more, on an annual basis.
The ruling came after a petition filed by SD Europe member Israfans through Adv. Dor Liond. The action was taken as supporters saw the Football Association would not comply with the provisions of its own regulations which require clubs to publicise their full financial reports on football activities – instead it tolerated the publication of only partial reports, often incomplete, by the clubs.
Her Honor, Einat Ravid, said: “From reviewing the reports submitted by the various groups, it appears that the reports submitted do not conform to the own standards the Israeli FA has set for groups”. She continued: “Taking into account this and the testimony of Professor Zelekha, the auditor notes are an integral part of the financial statements […] Therefore, […] the auditor notes contain essential information and details that gives meaning to the reports who otherwise should be considered incomplete[..]”
During the hearing process, the Israeli FA changed its rules to allow clubs that receive less than 10% of their budget from public funds not to publish financial statements with the Court ruling that “this is a problematic measure” and that “all clubs must publish their full and detailed reports in accordance with this ruling, for the seasons preceding the amendment’s decision starting from the 2014/15 and at least up to 2016/17.”
It was also determined that although the Football Association is a private professional body, the court has the right to criticise its conduct in issues related to good governance and sound management, and that Israfans have the legal right to represent all football fans.
Israfans lawyer Adv. Dor Liond said: “This is a landmark ruling on financial and management transparency in sports clubs and recognises the right fans have to know how their clubs are run.
“The Court sent a clear message to the sports associations that their members are not private property excluded from the obligations of public transparency, which is the primary means of empowering accurate reporting, the prevention of match fixing and the fight against corruption.
“We hope that the acclaimed gatekeepers for Israeli football will realise the importance of their role and their supreme commitment to preserving the public interest over the narrow interest of the group owners. Israfans will continue to monitor the developments and ensure that all clubs publish their reports to the required standard.”
Background to the judgment:
August 2014: the Israeli FA introduced regulation requiring the clubs in the professional leagues (two top tiers) to publish annually profit and loss and cash flow reports, as well as a report on all their football-related activities.
December 2014: Israfans, through Adv. Dor Liond, approached the Israel FA with a request to publish the club reports, as required by the regulations.
May 2015 (end of 2014/15 season): The Israeli FA has not release the reports, as required by the regulations. Israfans made a new request, this time to the Court.
Following the Court appeal and public pressure, the Israeli FA began partially publishing information on some of the clubs in the two top tiers. Most of the published reports did not meet the detail set out in the rules – for example clubs refrained from providing basic details about their financial situation or even about the capital of the “owner’s investment”.
Israfans continued to challenge this decision in Court which led to the ruling obliging clubs to operate in full transparency.
Israfans are the national supporters’ organisation of member-run clubs and supporters groups that want to participate in the decision-making process of football in Israel and now, following the acknowledgement of the Court, “have the right to speak on behalf of all Israeli supporters“.