LEGAL UPDATES BY BEPARTNERS
Sports Law: Contract 101 for Athletes
17 May 2024

Part 1: Sports Law in Indonesia

 

As to date, the sports sector in Indonesia has been loosely regulated under statutory regulations that supposedly provides an overbearing protection for all athletes within Indonesia. Whilst the laws and regulations related to sports law has not been fully developed into a comprehensive regulation/law that allows clear governance on the various aspects of national sports throughout Indonesia, there has been some commendable progress through the enactment of Law No.11 of 2022 on Sports Law (“Sports Law”)

 

The Sports Law has replaced Law No. 3 of 2005 concerning the National Sports System, and expected as an answer to the concerns of sports stakeholders about the need for improvement in various aspects of the national sports system. The Sports Law seeks to provide a comprehensive legal structure that promotes sports development and ensures the welfare and legal protection of athletes as well as compliance with national and international standards.

 

It cannot be denied that opting to be an athlete or as a profession in Indonesia, can be said to be a career choice that is quite high risk. Apart from the need to continue practicing to stay competitive, the athlete must also pay attention to his livelihood, both financially and physically and maintaining his status as an athlete.

In the world of sports, an “Athlete” is those who participate in sports training and championships regularly, systematically, integrated, tiered, and sustainable to achieve achievements[1]. The Sports Law then divides athletes into amateur, professional, and athletes with disabilities. Therefore, the status of athletes is very important and fundamental in the sports system in Indonesia, especially regarding the transfer of status from amateur to professional holds an important substance in determining the fate of athletes. Meaning, it does require special attention both in terms of regulation and policy making.

 

However, the Sports Law does not specifically regulate the change of status. Article 72 of the Sports Law delegates the provisions regarding the transfer of status based on Government Regulations, which until now there has been no clear provision regarding this matter. Therefore, many athletes, especially individual sports athletes, still have to fight for their status as professional athletes. Furthermore, it also requires guidance and cooperation from each relevant sports association to continue to provide assistance for the benefit of these athletes.

 

In addition to the status mentioned above, it cannot be denied that an athlete in carrying out his profession will undoubtedly intersect with the law. Due to the inevitable, athletes must have sufficient knowledge in this regard, especially towards sports contracts between the athlete themselves and the sports club they are affiliated with (specifically for team sports). The best insurance for any athlete to ensure they are provided with the best platform to perform their athletic potential, is to at the very least have legal professionals look over their contractual obligations. Unfortunately, athletes in Indonesia are not aware of their legal standings in any of their professional and marketing contract, which in turn, leaves athletes worried about aspects that should be the absolute last worry on their minds.

 

 

Part 2: Interview

 

To understand better, we have taken the initiative of speaking with the athletes themselves. We have discussed with a professional Indonesian athlete regarding their knowledge of their legal standing when it comes to their contractual obligations with their sponsors, marketing agencies, and other parties that are involved with their professional sports.

 

Q: Are you aware of the legal obligations of an athlete?

A: Yes, we are aware but we aren’t from the legal industry where we know 100% how we are protected whether that be legally or ethically. It is disheartening that there are aspects within my contract that the sponsor does not fulfill. There are times where what was promised was not fulfilled within the timeframe that was agreed which would leave me in a position to request additional sponsorships from private means.

It is very expensive being an athlete. It takes a toll on your body and your mental health.

 

Q: Have you tried discussing amicably with the sponsor(s)?

A: Of course, however, they always seem to try and strongarm us saying that we did not fulfill what was required within our contracts. It’s quite subjective but again they are the ones with the funds, not us.  We need to abide by their words.

 

Q: Have you ever thought of hiring a lawyer/mediator to help settle any disputes?

A: I have genuinely never thought of needing to hire this as to be quite frank, lawyers are expensive. And we don’t want to tarnish our reputation in the market of sponsors. It’s a bit of a dilemma. Do we want to retrieve what is rightfully ours as per the contact and risk tarnishing our names or just take it as it is. I regret not properly having a legal person help review and advice from the start of the contract negotiations.

 

Q: How has this impacted you in your pursuit to become the optimal athlete?

A: It really is tough. Having to think about the financial situation and managing myself is the last thing I need. What I want and need is to 100% focus on developing my skills as an athlete. An agent would help but from the offset, now that I think of it, having a lawyer look over my contract from the beginning could have avoided all this dilemma.

 

Q: Do you have any sort of agent or a manager that helps you?

A: I do not have an agent/manager yet as I am not on the level where I need one. I myself handle all my needs which include arranging my contracts with sponsors, administrative dealings with event organizers for my participation, coaches (i.e. strength, conditioning, , nutritionist(s), fan base, and other aspects.

 

Q: Have you ever engaged in any sporting contracts related to your professional development as an athlete and your financial endeavors?

A: Yes. This is an integral part of our progression as a professional athlete.  We are required to be placed within a safe and progressing environment to ensure that we can perform to the best of our capability. I have signed with numerous companies which ensure that our environment and progression is optimal to perform to the best of my capability as an athlete.

 

Q: After speaking with us would you hire a law firm to handle your affairs?

A: To be honest, after having spoken with you guys, I feel that having a well-rehearsed lawyer to look over my contract would have been a life saver. If I made sure all my obligations and rights are clear and established, I wouldn’t have to worry about silly things like this.

 

 

Conclusion:

 

We at BE Partners see the need for lawyers to assist athletes right up from the beginning. Looking over the contracts with their sponsors and marketing initiatives is key to ensuring that the athletes can focus on developing their sporting skills in their discipline instead of focusing on whether they have any legal grounds to demand their promised sponsors.

 

 

 

Part 3: Legal Standing

 

The discourse on the relationship between athletes and clubs in the context of Law No. 6 of 2023 on Manpower (“Manpower Law”) revolves around the issue of determining whether such a relationship is a working relationship. This is because there are fundamental differences in characteristics between athletes and workers in general. This difference can be seen from the elements of command and dependence in the relationship between athletes and trainers or clubs.[2]

 

In broad outline, the characteristics of the employment relationship between athletes and clubs are apparent in the relationship between athletes and clubs. There are elements of employment in the form of professional sports activities, a period time that is generally stated in the contract with the athlete, and income based on the nominal value of the contract where this is in accordance with the elements of employment relationships outlined in Manpower Law and Civil Law contract standards.

 

In the realm of sports law, contracts between athletes and clubs follow a similar structure and content to those found in everyday commercial agreements. The framework of a sports contract, including its articles, mirrors that of a standard agreement with specific clauses outlining the athlete's responsibilities. One key aspect of a sports contract is the athlete's obligation to comply with club management's instructions on non-technical, administrative matters related to membership. In contrast, when it comes to the technical aspects of their work, athletes are expected to receive guidance from their trainers or assistant trainers. Types of contracts for athletes generally include professional services contracts, endorsement contracts, appearance contracts, and marketing contracts.

 

In terms of legal protection, Sports Law emphasizes the need to position sports clearly in the national legal system as part of the process and achievement of national development goals as this law provides for the welfare of athletes, including the right to be accompanied by managers, coaches, medical personnel, psychologists, and legal experts, as well as the right to participate in championships, receive coaching and development, and get a decent income.[3]

 

A working relationship between athletes and their overseeing organization/club is established through a signed work agreement or decision letter. These agreements typically last 6-12 (six to twelve) months and outline the athlete's responsibilities, which are evaluated based on match performance.[4] Athletes may face sanctions if they fail to comply with orders/instructions from clubs or trainers. These sanctions can include verbal warnings, written reprimands, suspensions, or even the termination of their contract.

 

Apart from the obligations of the athlete, which arise from a contract between athletes and clubs, the Sports Law also regulates the rights of an athlete, which include facilities, financial aid, employment opportunities, honors, promotions, citizenship, welfare, or other forms. that are beneficial to the athlete. The Sports Law also addressed that athletes are entitled to social security protection through a national social security system, such as health insurance, employment injury security, and old age security.[5]

 

The disputes commonly occurring between the organization and the athlete are regarding rights and disputes over termination of employment relationships, both of which can be resolved through legal efforts outside the court, such as mediation, conciliation, and arbitration. Furthermore, Sports Law also stipulated that dispute resolution in the sports sector shall be carried out by an independent sport arbitral institution that shall be established in accordance with the Statute of Olympics,[6] It is addressed that Indonesian Sports Arbitration Board (Badan Arbitrase Keolahragaan Indonesia or “BAKI” and Badan Arbitrase Olahraga Indonesia or “BAORI”) and BAKI will carry out their respective duties and functions until the formation of a Sports arbitration body based on applicable law.[7]

 

In conclusion, based on the statements above, the lack of regulation of employment relations in the sports sector creates a gray area in legal protection in the contractual relationship between athletes and clubs wherein athletes need to treat their contracts just as they are, contracts. Establishing clear legal obligations and requirements are key to ensuring that their rights are upheld. Ensure that the sponsorship is clear, how long the contract lasts for, the payment of the sponsors, when are they released, how are they released, what are the perks and potential termination clauses (for both the Sponsor and the Athlete) are vital.

 

This is because the relationship between athletes and their respective clubs tends to be within the scope of temporary service agreements or contracts. Therefore, there is a concern that the protection factor, especially for professional athletes in sports, will only be based on the "agreement" of the parties concerned. Athletes, regardless of their sporting discipline, must be guided appropriately in their understanding of their contractual obligations and work agreements with their sponsors. Proper education and programs such as education and training of management in sponsor companies must be in line to ensure the prosperous future of sports in Indonesia.

 

To discuss further the developments of Sports Law and the counselling for athletes, please feel free to reach out to us.

 

[1] Article 1 Paragraph 6, Law No. 11/2022.

[2] Tim Hukum Online, “Olahragawan Perlu UU Ketenagakerjaan Tersendiri”, https://www.hukumonline.com/berita/a/olahragawan-perlu-uu-ketenagakerjaan-tersendiri-lt5270c4d984c93/?page=1 , accessed on May 1, 2024.

[3] Indra Saputra and Mohamad Tohari, “Legal Protection of the Welfare of Sports Athletes in the Perspective of Law Number 3 of 2005”, Journal Research of Social Science, Economics, and Management, Vol. 2, No. 11 (2023). https://doi.org/10.59141/jrssem.v2i11.474

[4] Dio Novandra Wibawa, "Perlindungan Hukum Terhadap Atlet Pelatihan Daerah Dengan Organisasi Komite Olahraga Nasional Indonesia Terkait Kontrak Kerja”, Jurist-Diction, Vol. 2, No. 6 (2019)

[5] Article 100, Law No. 11/2022.

[6] Article 102, Law No. 11/2022.

[7] Article 105, Law No. 11/2022.

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