Court Rules Professional Football Leagues to Become Public Benefit Company

Israel's Central District Court has rejected an appeal by the Professional Football Leagues Directorate, ruling that the organization must be registered as a company for public benefit (חל"צ - "Heletz"). The court determined that the Directorate's primary purpose is to advance football in Israel, a public objective, despite its extensive commercial activities.

The Directorate, established in 2014 as a private company managing the top two professional football leagues, had argued that its mission to maximize revenue for football clubs and transfer tens of millions of shekels annually was incompatible with public benefit status. It also claimed that transitioning to a "Heletz" would hinder its operational flexibility due to restrictions on executive salaries, related-party transactions, and regulatory oversight, potentially impacting its ability to manage broadcasting rights, sponsorships, and other commercial activities.

Presiding Judge David Zeller dismissed these arguments, emphasizing that the Directorate operates under authority delegated by the publicly oriented Football Association, which itself functions under the Sports Law. The court clarified that maximizing revenue is a means to promote professional football, not an end in itself. It also addressed the transfer of funds to clubs, stating this is based on their active participation in the leagues, not shareholder status, and that the Directorate's bylaws already prohibit dividend distribution.

The court further noted that the "Heletz" status would not prevent the Directorate from continuing to transfer funds to clubs under the existing model. The ruling also highlighted the need for increased oversight, citing that many football clubs are non-profits themselves and receive public support. Past attempts to amend the Directorate's bylaws to allow profit distribution or private investment reinforced the need for a framework ensuring public benefit.

The Directorate's appeal was fully dismissed. It must transition to "Heletz" operations by January 1, 2027, and was ordered to pay 15,000 shekels in legal costs.