An ongoing game: Economic measures to combat the effects of the corona virus crises on sport in The Netherlands

By Elly Besterveld, support lawyer, and Dolf Segaar, sports lawyer, CMS, Amsterdam, The Netherlands

Since the start of the Coronavirus (Corona) crises in The Netherlands, sports competitions have been terminated, sports clubs have closed, and all sports events have been cancelled until 1 September 2020.

This not only creates a great number of organizational and social problems, but also entails major financial consequences for sports organizations and top athletes.

A brief overview follows of the measures that have been taken so far to support financially the Dutch sports’ sector.

Economic impact of the Corona measures

The NOC*NSF, the overall coordinating Dutch sports organization that also functions as the Dutch National Olympic Committee and National Paralympic Committee, has published in March an estimation of the economic impact of the measures in connection with the Corona virus for the sports sector. The NOC*NSF estimates that the total damage for the sports sector until 1 August 2020 is 950 million euros.

Because competition will not resume this season, the financial damage for Dutch professional football amounts to 110 million euros for the professional football organizations.
In response to the estimated economic damage, NOC*NSF and other sports organizations have called on the government to establish an emergency fund for sport.
In addition, NOC*NSF has set aside 4 to 5 million euros to fill a Corona Emergency Fund for Sport. The national government and other sports organizations have been asked to participate in this Fund.

Government actions

Reimbursement for entrepreneurs

The government has awarded entrepreneurs in a number of specific sectors, including the sports sector, who have been affected by the Corona measures, under certain conditions, a one-time, fixed reimbursement of €4,000 (tax free). This is called the Reimbursement for Entrepreneurs in Affected Sectors COVID-19 (“Tegemoetkoming Ondernemers Getroffen Sectoren COVID-19, TOGS”).
The reimbursement is for those SMEs, with or without staff, that suffer loss because of: necessary closing of their enterprise, restriction of meetings and/or curtailment of travel.
For more information see: https://business.gov.nl/the-coronavirus-and-your-company/

Compensation of wages

Sports clubs, who employ staff, and expect a turnover loss of at least 20% for at least three consecutive months can claim, under certain conditions, compensation towards wages for a period of 3 months from NOW: Temporary Emergency Bridging Measure for Sustained Employment (“Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud NOW”). Clubs can claim a maximum of 90% of wages, depending on how much turnover they lose. Please note, however, that if a club claims NOW, they are not allowed to  dismiss employees on economic grounds during the period for which they receive compensation.
For more information see: https://business.gov.nl/the-coronavirus-and-your-company/

Emergency fund for sport

Very recently, the Dutch Government announced that it has set up an emergency fund of 110 million euros to support Dutch amateur sports associations. This emergency fund is not aimed at professional sports.

Of these 110 million euros, 90 million is intended for cancelling the rent for accommodations of sports clubs over the period March 1 to June 1. For many sports clubs, rent is the largest cost item on their budgets. The remaining 20 million is intended for sports clubs who have their own accommodation. These associations are faced with loss of turnover and recurring expenses. Each sports association gets a one-off allowance of up to 2,500 euros.

Other actions

Postponement of repayment obligations

The leading Dutch banks (ABN AMRO, ING, Rabobank, Volksbank – including SNS and ASN – Triodos and BNG Bank) have jointly announced that there are possibilities to suspend temporarily payment obligations (for six months). The announced leniency provisions apply to business loans of up to 2.5 million euros in all sectors, including the sports sector. Repayments for business loans of up to 2.5 million euros can be suspended for six months, provided that the companies are healthy and not already facing payment problems.

One-off accommodation allowance

From May 2020, the NOC*NSF supports talented young athletes up to the age of 21 or their parents, who are in financial difficulties due to the consequences of the Corona pandemic, with a one-off allowance for accommodation costs. The target amount is a maximum of 1,000 euros per athlete.

Economic impact on professional football

Dutch professional football is in discussions about possible financial measures in the short term for clubs, because this season’s competition is terminated. The Players’ Union and the Federation of Professional Football Organizations (FBO) stated in a joint statement that they are looking at how to limit the financial impact as much as possible.

Financial support package for football clubs

In April 2020, the KNVB, the governing body of football (soccer) in Netherlands, the ING Bank, the main sponsor of football in the Netherlands, and the Dutch soccer team jointly presented a financial support package for football clubs. It concerns a combination of donations, measures and grants representing a total of 11 million euros.
The donations of the Dutch soccer team and ING bank focus on amateur football. ING Bank supports all amateur clubs with an extra contribution. This donation is in addition to all current sponsorship obligations of the ING Bank.
The KNVB offers support to both professional football clubs and amateur associations. The support from the KNVB for professional football consists of the accelerated provision of funds and the suspension of the repayments on the loans for six months that some clubs have incurred with the KNVB.

Finally

Just like in other sectors, the effect of the Corona pandemic on sport is gigantic. Various emergency measures have already been taken in The Netherlands to support the sports sector. More measures are likely to follow.

It is hoped that these measures will be enough for the sports sector to survive these crises fairly intact!

 

Elly Besterveld and Dolf Segaar may be contacted by e-mail respectively at ‘elly.besterveld@cms-dsb.com’ and ‘dolf.segaar@cms-dsb.com’