Assignment of Receivables and Club Financing

1. Introduction

The financial sustainability of sports clubs depends not only on sporting success but also revenue management .
Today, football clubs in particular often pledge revenue from sources such as broadcasting rights, sponsorship deals, ticket sales, and merchandise licensing loans or cash flow financing .

This practice is based on the assignment of receivables institution regulated in Articles 183–194 of the Turkish Code of Obligations (TBK) . However, specific to sports clubs, assignment transactions are limited not only by the debt relationship but also by the club licensing system , UEFA Financial Fair Play (FFP) , and TFF regulations .

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2. Legal Basis of the Institution of Assignment of Receivables

2.1. Turkish Code of Obligations Article 183 and the Principle of Transferability

Turkish Code of Obligations, Article 183: "A creditor may transfer his claim to a third party without the debtor's consent."

With the assignment process, the receivable passes to the assignee. The debtor's consent is not required for this transaction , but the debtor must be aware of the assignment (Turkish Code of Obligations, Article 189).

2.2. Formal Requirements

Turkish Code of Obligations, Article 184: "The validity of the transfer depends on it being in written form."

Therefore, in every case where clubs transfer broadcasting or sponsorship revenues, a written assignment agreement must be made.
In practice, these agreements are usually with banks or financial institutions .

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3. Assignment of Club Revenues Practice

3.1. Assignment of Publication Revenues

In Turkey, the broadcasting revenues of Super Lig and 1st Lig clubs are distributed through the Turkish Football Federation (TFF) . Clubs frequently secure short-term financing by assigning these receivables from the TFF to banks or investment funds

Supreme Court 11th Civil Chamber, Case No. 2018/2145, Decision No. 2019/3254:

"It is possible to assign broadcasting revenues held by the TFF; the assignment becomes effective upon notification to the TFF."

However, for the assignment to be valid;

• the receivable being due (having arisen or its arising being certain),

• The absence of a contractual provision prohibiting assignment,

• It needs to be entered into the TFF's information and registration system.

3.2. Assignment of Sponsorship Revenues

Sponsorship revenues, generally based on private law contracts, are subject to the free will of the parties.
Sponsorship fees are assigned to banks or factoring companies in cash flow management .

Supreme Court 19th Civil Chamber, Case No. 2020/2456, Decision No. 2021/1654:

"The assignment of sponsorship receivables is valid as long as it does not constitute a breach of contract terms."

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4. Financial Objectives and Implementation Models of Assignment

these transactions offer clubs early cash conversion of revenues , they can create revenue dependency in the long run.

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5. TFF Club Licensing Regulations and Financial Limits

5.1. TFF Regulations

Turkish Football Federation Club Licensing Regulations, Article 54:

"Clubs are required to notify the Turkish Football Federation (TFF) of any transactions involving the assignment or pledging of their revenues."

This regulation aims to ensure financial transparency for clubs.
Failure to report the violation may result in the suspension of the club's license.

5.2. Financial Fair Play (UEFA FFP)

UEFA's Financial Fair Play (FFP) regulations prohibit clubs from "borrowing more than their income." Using future broadcasting or sponsorship revenues to pay off current debts is considered "premature use of income" under FFP

UEFA CFCB Decision (Galatasaray, 2016):

"Disclosing assigned revenues outside of the financial statements is contrary to the principle of transparency."

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6. Notification of Assignment and the Debtor's Position

6.1. Importance of Notification

The assignment of receivables takes effect as soon as it is notified to the debtor (e.g., the Turkish Football Federation or the sponsoring company) (Turkish Code of Obligations, Article 189).
Unless notification is given, the debtor can pay the receivable to the former creditor and be released from their debt.

Supreme Court 19th Civil Chamber, Case No. 2017/3145, Decision No. 2019/1854:

"Payments made without prior notification of assignment are not binding on the assignee."

6.2. Notification Procedure to the Turkish Football Federation (TFF)

Clubs submit the assignment notification to the TFF via a notary public, and the TFF Financial Affairs Department registers the assignment in its system.
The assignment is not considered valid unless this registration is completed.

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7. Limitations and Invalidity Cases of Assignment

7.1. Prohibition of Assignment

If the broadcasting or sponsorship agreement contains a "prohibition of assignment," the assignment transaction becomes invalid according to Article 183/2 of the Turkish Code of Obligations

Supreme Court 11th Civil Chamber, Case No. 2019/3546, Decision No. 2020/2873:

"If the prohibition of assignment is regulated by an explicit provision, the assignment made is null and void."

7.2. Uncertainty Regarding Receivables

The assignment of receivables that have not yet arisen or are conditional is only valid if they are "certainly due" to arise.
The assignment of future broadcasting revenues of sports clubs is only possible if the contract duration and price have been determined.

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8. Banking and Financial Aspects

Clubs often pledge or assign broadcasting revenues when obtaining loans from banks . In this case, the assignment is an annex to the financing agreement.

Application Example:
In 2019, Ziraat Bank implemented the "Clubs Association Consolidation Model" in the financial restructuring of Turkish Super League clubs by assigning their broadcasting revenues as collateral.

In this model, the assignment provided the authority to directly collect on loan repayments .

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9. CAS and UEFA Case Law

CAS 2018/A/6012 – Club v. Bench:

“Ownership of assigned revenues passes to the assignee; however, debts must be settled within the framework of the club licensing system.”

UEFA Licensing Decision 2020 (Beşiktaş Case):

"Showing assigned sponsorship revenues off the balance sheet constitutes a financial reporting violation."

These precedents demonstrate that assignment transactions are not only a matter of private law, but also a regulatory dimension

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10. Tax Implications

The assigned income is no longer considered "income" for the club, but rather a transferred receivable . The bank or financial institution is liable for withholding tax and VAT on the amount collected . For the club, this transaction should be shown as an off-balance sheet debt reduction item.

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11. Risks and Recommendations

• Permanent assignments of receivables undermine the club's independence by mortgaging future revenues.

• There is a risk of license revocation by the Turkish Football Federation (TFF) and UEFA.

• Assignment agreements must be clearly duration, scope, debt relationship, and security limits .

• Multiple assignments should not be made on the same income (Turkish Code of Obligations, Article 190).

Supreme Court 19th Civil Chamber, Case No. 2021/2634, Decision No. 2022/1431:

"In cases where the same receivable is assigned to more than one person, the assignment that was notified first is valid."

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12. Sample Assignment Clause

“The club assigns its receivables from the 2025–2026 broadcasting revenues held by the Turkish Football Federation (TFF) to the Bank under this agreement.
The assignment shall remain in effect until the debt is paid.
The club undertakes not to make a second assignment on the same revenue.”

This clause constitutes an example of an assignment in accordance with the Turkish Code of Obligations and the Turkish Football Federation regulations.

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13. Conclusion and Evaluation

Assignment of receivables is a tool that provides financial flexibility for sports clubs , but it must be managed carefully. For a legally valid assignment, the following elements are essential:

1. Written contract (Turkish Code of Obligations, Article 184),

2. Notification to the TFF or the debtor (Turkish Code of Obligations, Article 189),

3. The absence of a prohibition on assignment,

4. The income must be fixed and accrued.

From the perspective of Financial Fair Play principles, the purpose of assignment of receivables should not be debt repayment, but rather achieving financial balance .
Otherwise, the club will face sanctions not only in terms of sporting success but also in terms of financial discipline.