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Milei's government takes a stand and appeals the suspension of sports limited companies

The Argentine government is not willing to stand idly by after the court decision that suspended the implementation of the Sports Limited Companies (Sociedades Anónimas Deportivas, SAD). Javier Milei's administration has decided to appeal the precautionary measure that halts the progress of this reform, one of the strongest bets of his administration to change the structure of football clubs in the country.

On 2 September, a federal judge in Mercedes decided to suspend part of the Necessity and Urgency Decree (DNU) that allowed the creation of SADs. This measure was requested by the Argentine Football Association (AFA), which from the beginning has been against government intervention in football affairs. According to the AFA, the decree signed by Milei at the end of 2023 amounts to unacceptable state interference in the private sphere of clubs, many of which are non-profit civil associations.

The judge ruled in favour of the AFA, arguing that the SADs would imply the entry of private commercial interests into a space that has traditionally been far removed from this type of capital. In his ruling, the magistrate made it clear that the clubs should continue to operate as civil associations, at least until the merits of the case were resolved.

The position of Milei's government

Milei's government was quick to react. They described the measure as a ‘legal nonsense’, claiming that the judge in Mercedes has no jurisdiction to intervene in an issue that should be resolved by the Federal Capital's justice system. For them, the decision is nothing short of nonsense, as the DNU has not yet come into force and the regulation that would allow private capital to enter the clubs has a one-year deadline for its implementation.

The government's justice minister, who has led the defence of the decree, insisted that the judge's move is premature and lacks solid grounds. ‘There is no periculum in mora,’ the ministry said, referring to the lack of urgency that would justify such a drastic intervention. In short, they consider that the suspension was unnecessary and out of place, given that the clubs still have time to decide whether to adopt the SAD model or maintain their current structure.

Why SADs?

The SAD project has been one of the most controversial proposals of the Milei government, but also one of the most ambitious. The idea behind this model is to open the door to private investment in clubs, allowing them to be run as limited companies instead of civil associations. For the government, this would help to clean up the finances of Argentine football, which has been in financial trouble for years.

Milei and his team believe that the implementation of SADs would allow members to freely choose how to organise their club, without the state interfering. In their view, the entry of private capital could improve infrastructure, enhance competition and ultimately make Argentine football more competitive at the international level.

The AFA's defence

For its part, the AFA remains firm in its position of rejection. For the governing body of football in Argentina, the creation of SADs is a threat to the clubs as they exist today. The AFA has pointed out that allowing the entry of SADs would open the door to the commercialisation and commodification of clubs, something that goes against the traditional principles of Argentine football, where the members have the final say.

In its submission to the courts, the AFA made it clear that Milei's decree ‘violates countless articles of the National Constitution’, and that allowing SADs to compete with existing clubs would generate an inequality that would undermine the essence of Argentine football.

The government's appeal is already underway, and everything indicates that this legal battle is going to be a long one. In the meantime, the Sociedades Anónimas Deportivas remain a hot topic in the country, with many clubs and fans divided over the benefits and risks of this model.

In the midst of this storm, the Milei government has also begun to question the impartiality of the judge who issued the injunction. They do not rule out even initiating action in the Council of the Judiciary to request his impeachment, which would add fuel to the fire of this conflict.

The only thing that is clear at the moment is that the fight for the future of Argentine football has only just begun. The SADs could be a radical change for the clubs, but for now, their implementation remains on hold, pending the decision of the higher courts.