Congress approved the law reforming the regulatory framework for Professional Sports Corporations (SADP) in Chile.
On Wednesday, March 25, Congress approved the bill amending Law No. 20,019 on Professional Sports Corporations (SADP), regarding oversight, conflicts of interest, and the promotion of fan ownership in these entities (Bulletin No. 10,634-29).
The initiative introduces a structural reform to the professional sports regime in Chile, with a direct impact on clubs, investors, sports agents, and other market participants.
Among other matters, this law incorporates the following:
1. New institutional framework:
It establishes a broader system of professional sports organizations, distinguishing between grassroots professional sports organizations and professional sports leagues, whose formation and operation are expressly regulated. Both categories must be registered in the Public Registry of Professional Sports Organizations, administered by the National Sports Institute (IND).
2. Oversight and supervision:
A shared supervision framework is established among the IND, the Financial Market Commission (CMF), and the Financial Analysis Unit (UAF). The latter will have jurisdiction over leagues and entities that conduct public offerings of securities, raising standards to those of the capital markets.
3. Restrictions on ownership and control:
Multiple ownership is prohibited, under certain conditions, within the same league, and the identification and disclosure of beneficial owners are required. In general, those who hold shares in more than one professional sports organization must divest their shares in one of them within a maximum period of 3 months.
4. Corporate Governance and Incompatibilities:
Rules are introduced regarding disqualifications and incompatibilities for membership on boards of directors, management teams, and other governing bodies of sports organizations, as well as regulations on conflicts of interest. Stricter requirements regarding corporate governance and the separation of duties within the sports ecosystem have also been incorporated.
5. Related-Party Transactions:
Professional sports organizations and leagues will be subject to the related-party transaction regime under Law No. 18,046, thereby strengthening transparency standards.
6. Fan Participation:
Fan organizations are recognized, and consultation mechanisms are established for matters related to the club’s identity and relevant interests.
7. Sports agents:
The reform includes a prohibition on professional sports agents from being owners, partners, or affiliates of grassroots professional sports organizations within the same sport.
<b>8</b>. Transitional Provisions:
Existing entities must comply with the new regulatory framework within 18 months of the law’s publication, with an additional 180-day period provided for the Ministry of Sports to issue the law’s implementing regulations.
The approved bill will be sent to the Constitutional Court in the coming days for a constitutionality review. If no constitutional objections are raised, the law will be enacted and published in the Official Gazette, entering into force within the coming weeks.
For more information on the scope and implications of this proposal, please contact our Corporate and Business team.
Álvaro Rosenblut | Partner | arosenblut@az.cl
Stephanie Cruz | Legal & Business Director | scruz@az.cl
Vicente Martínez | Senior Associate | vmartinezw@az.cl
Raimundo Busquet | Associate | rbusquet@az.cl
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