How have football club sales affected South African-based footballers?

About 200 football players, one in three, have been affected by the sale of football clubs in the DStv Premiership, South Africa’s top-flight league, since 2019/20.

The league had just under 600 players in each season since 2018/19.

The majority of the affected footballers played for teams that would operate from entirely new cities following their sale, sometimes hundreds of kilometres away from where they were originally contracted to be based. 

In a previous story, we highlighted that when a football club acquires the services of a football player, this is essentially a contract of employment between the club and the player.

You can read more about that here: 826 SA-based footballers have been involved in transfer market activity since 2019

From an employment perspective, if the players are employees of the club, and the club [the employer] is sold to someone else, the new owner steps into the shoes of the old owner, said Nombulelo Myeni, a labour and employment law associate at Johannesburg-based law firm Lawtons Africa.

“There can be some changes to the employment conditions, but what would typically happen is that when the new owner steps into the shoes of the old one, they adopt all the obligations that come with those [existing employment] contracts.”

Not only does the new employer get the old employer’s players as part of the sale, it also gets the club’s status in the DStv premiership, providing a quick loophole to get ‘new’ teams into the 16-team league.

At the end of the 2019/20 season, two DStv Premiership clubs were sold, affecting 79 players:

  • Johannesburg-based Bidvest Wits’ club status, previously owned by JSE-listed Bidvest Group in partnership with the University of the Witwatersrand, was sold to businessman Lawrence Mulaudzi. Mulaudzi renamed the club to Tshakhuma Tsha Madzivhandila (TTM) and relocated it to Thohoyandou in Limpopo, around 480 kilometres from Johannesburg.
  • Johannesburg-based Highlands Park’s club status, previously owned by Larry Brookstone, Brad Kaftel, and Hadley Lasarow, was sold to attorney and former player agent Tim Sukazi. Sukazi renamed the club to TS Galaxy and relocated it to Siyabuswa in Mpumalanga, over 180 kilometres from Johannesburg. 

Three DStv Premiership clubs were sold, affecting 121 players, by the end of the 2020/21 season:

  • Durban-based AmaZulu’s club status, previously owned by Dr Patrick Sokhela, was sold to investment holding company Zungu Investments Company (ZICO). ZICO chairman Sandile Zungu did not rename or relocate the club. 
  • Free State-based Bloemfontein Celtic’s club status, previously owned by businessman Max Tshabalala, was sold to socialite and businesswoman Shauwn Mkhize. Mkhize renamed the club to Royal AM and relocated it to Durban in KwaZulu-Natal, over 630 kilometres from Bloemfontein.
  • TTM’s PSL club status, which was acquired just eight months prior, was sold to Protoscape 202 CC. New owner, pharmaceuticals businessman Dr Abram Sello, renamed the club to Marumo Gallants and relocated it to Polokwane in Limpopo, over 150 kilometres from Thohoyandou. 

This means that five of the Premier Soccer League’s (PSL’s) top-flight teams, over a quarter of the DStv Premiership teams in each season, have been sold to new owners during this period. 

How have players been affected by club sales in this time?

The sale of football clubs is not rare in world football, however in South Africa, players have to contend with the added layer of the new owners possibly renaming and relocating their clubs – a common occurrence in the PSL.

Every team sold since 2019/20, had a squad size of about 40 players each.

Of the five clubs that were sold during this time, only one, AmaZulu, was not renamed and relocated to another city, meaning that its 45 contracted players were able to continue, uninterrupted, with the initial agreements that they had signed.

For the rest of the players in the remaining four clubs that were sold –  who make up about a quarter (155) of the league’s total average players during this time – they have had to make other arrangements to meet their contractual obligations in another city, under a new club name.

The Basic Condition of Employment Act states that the place of employment is often a fundamental term of the employment contract and is one of the particulars that an employer is required to provide to an employee, in writing, at the commencement of employment. 

This was highlighted by Myeni, along with labour and employment law consultant Lavery Modise, and commercial litigation associate Clinton Mphahlele – who are all attorneys at Lawtons Africa – in their jointly written article about football club sales, which you can read here.

The firm is involved in several aspects of sports law, including football club sales.

Typically, Myeni told The Outlier, a player’s contract will provide for relocation. 

But if, “for some odd reason”, that provision has not been accommodated in the contract, and the player insists on not relocating, there would have to be discussions around how the player and the club can mutually separate. 

One player not wanting to relocate is not reason enough to stop the entire commercial transaction from taking place, she said.

According to the Labour Relations Act, the transfer [of ownership] should not negatively impact the contracts of the employees, who in this case would be the players. 

She explained that this is how the Act ensures that those players are protected in terms of what their initial contracts provided for, and that all those obligations are fulfilled by the new owners.

“If there are changes to the terms and conditions of employment, those terms and conditions cannot be less favourable to the players, than what they were with the previous owners.”

Myeni, Modise, and Mphahlele also write in their article that dismissals for reasons related to a transfer of a business are automatically unfair. 

And in these circumstances, the affected footballers and other employees employed by the football club bought by a new owner, will have legal recourse should they be dismissed for reasons related to the sale.

What other options do affected players have when the sale of a club involves relocation?

In instances where the sale of a club involves relocation and the player insists that they cannot move to another city, the club can – in agreement with the player – negotiate a transfer agreement deal with another club, said Lawtons Africa commercial litigation director Palesa Maseko.

If the club cannot transfer the player to another club, they can release the player as a free agent, and come to an agreement as to how the player would be paid out of their current contract. 

Mphahlele explained that club sales are usually aligned to the transfer window period, which is when the PSL would grant approval for the sale, and transfer of ownership from the old owners to the new owners.

“Because of this, the concern of players not being able to transfer to new clubs [during the sale of a club] does not usually arise due to the timing of these transactions,” he said.

The ongoing sale of football clubs does not necessarily bring the business activities of the PSL and its member clubs to a halt. So, transfer market-related activity concerning clubs which are being sold, as well as their contracted players, can still take place if there is interest from the other clubs in the league.

While the sale is ongoing, the players would still be registered with the owners who are trying to sell.  Any club that is looking to acquire these players would need to approach the selling club to begin negotiations, said Maseko. 

After the sale of the club has been concluded, and the player’s registration has transferred to new ownership, any club looking to acquire their players  would now have to negotiate a transfer agreement with the new owners.

How have football club sales altered the direction of the league?

Most of the clubs cited financial difficulties as their reason for selling during the two seasons in question. But the renaming and relocation of the clubs have often undermined the proper application of the league’s competition rules. 

Football clubs ideally have to enter and exit the professional football ranks either through achieving promotion, or succumbing through relegation. This is how football league competitions are structured, as defined by Fifa statutes, which govern professional football worldwide. 

However, the sale of South Africa’s top-flight clubs, and their subsequent renaming and relocation – which is often part and parcel of these sales – have provided for this now controversial loophole where some clubs do not gain entry into the DStv Premiership through merit – as has been the case with Royal AM, TS Galaxy, TTM, and Marumo Gallants, which are relatively new clubs that aren’t even a decade old.

These clubs eventually bought their places in the league after failing to achieve promotion from the second-tier GladAfrica Championship during this period – wiping out long-standing clubs such as Bidvest Wits, Highlands Park and Bloemfontein Celtic – which have a combined 215-year old history.

The renaming and moving of teams has meant that more than half of the PSL’s founding member teams no longer feature within South Africa’s professional football setups, which is most likely what has led to local football losing momentum with its traditional support base, as witnessed with the state of South Africa’s almost empty stadiums during match days.

Moreover, the league has failed to provide leadership through exploring alternative survival measures for smaller clubs that are struggling financially, to protect their heritage, along with its integrity.

This has, unfortunately, left a bitter taste in the mouths of many in the football fraternity. 

Ultimately, if all it takes is money being thrown at established teams – who lack the financial means to be sustainable – to reshape the league, in a manner that undermines the core values of the sport, then is there a point to it all?

Turn your data into powerfult insights