In the spotlight: Joseph Hobbins

Joseph Hobbins, Solicitor in our Charities and Not-for-Profit team, explores what makes the sports sector unique, from governance challenges to the growing importance of commercial activities.

How long have you been working in the sports sector, and what first drew you into that space?

I have been working in the sports sector as a solicitor for three years, specialising in charities and not-for-profit organisations. Before qualifying, I spent two years as a trainee solicitor working with sports clubs on property matters, disputes and commercial contracts.

I’m a keen golfer and volunteered at my local club as a junior member. I also enjoy trying new sports (currently padel and badminton) and watching athletics, football and rugby, both live and on TV.

Combining my passion for sports with my enthusiasm for charities and not-for-profit work means I bring together two areas that complement each other. This allows me to give sports charities and governing bodies advice that is grounded in both legal expertise and a genuine understanding of how they operate.

How would you describe the work you do day-to-day, and the types of matters you tend to advise on in the sports sector?

There really are no two days the same. My work within the sports sector includes advising on:

Incorporating sports clubs as various charitable and not-for-profit entities, such as:

• Charitable Incorporated Organisations (CIOs)
• Charitable Companies
• Community Interest Companies (CICs)
• Community Amateur Sports Clubs (CASCs)
• Companies Limited by Guarantee

Advising clubs that have not yet formally registered as a legal entity on their structure, including the benefits of doing so

The governance of sports, such as:

• Amendments to their governing documents
• Intragroup agreements
• Compliance with the relevant governance codes (for example, the Code for Sports Governance)
• Appointment and removal of directors

Establishing and operating trading subsidiaries for charity and not-for-profit sports clubs

Charity Commission applications for charity sports clubs

Collaboration with other entities (including other sports clubs, governing bodies, funders and local authorities).

As a result, the types of sports clubs I act for include anything from athletics clubs to zorb football clubs and everything between.

When working on complex arrangements in the sports sector, what are the key issues organisations need to think about from the outset?

For charity sports clubs, it’s always worth considering whether Charity Commission approval or engagement is needed. Common situations where this applies include:

• Making certain changes to their governing document (regulated alterations)
• Considering the disposal of charity land
• A serious incident occurring within the charity (for example, a safeguarding issue)
• Transactions with connected persons (ie conflicts of interest).

Charity and not-for-profit sports clubs are subject to specific restrictions such as non-distribution to members, asset locks and restrictions on trading activity. As a result, additional thought is required when commencing a project, compared with private limited companies.

Looking back, what’s one lesson you learned early on in the sports sector that still shapes how you advise today?

Each sports club, even those operating within the same sport, has very different needs. As a result, sports clubs should be viewed individually with their own intricacies assessed in detail.

It’s sometimes easy to view an organisation as an entity or a certain type of structure. In the sports sector, the sport or sports that the club facilitates build and shape the organisation and its operations.

As a result, when advising a sports club, I pride myself on my ability to gain an understanding of the needs unique to that sport in order to assist the club.

What makes advising in the sports sector different from other sectors you’ve worked in?

Without a doubt, our clients’ passion and enthusiasm for their clubs and sports.

In the charities and not-for-profit sector in general, I have the pleasure of working predominantly with people giving up their time on a voluntary basis. The commitment required of trustees, employees and volunteers of sports clubs is particularly demanding, difficult and by no means straightforward.

As a result, I find the commitment and overall passion of those working at sports clubs infectious and admirable.

Can you share a proud highlight from your sports work?

Given the variety of our engagement in the sports sector, it’s difficult to pinpoint one project. For different reasons, two matters resonate with me.

Firstly, we helped set up a charity focused on concussion research and support. The foundation was already working with major sports clubs and individuals to promote research into concussion injuries and support for those affected. Now that it’s registered as a charity, the foundation can continue its mission with the additional benefits that charity status brings.

On a different scale, we continue to act for a sports foundation with an annual income of over £2.25m. By advising this foundation on all aspects of governance, we have gained an in-depth understanding of how it operates and what it needs. Our work has included updating its articles of association, helping with contracts with Sport England, assisting with grant agreements, preparing guidance on how committees make decisions and providing day-to-day governance advice on both routine matters and bigger strategic decisions.

These matters stand out as each one, along with all instructions in the sports sector, presents an opportunity to learn about each entity and its activities.

What’s a common misconception people have about charities and not-for-profit work in the sports sector?

Misconception: that a Community Interest Company is a charity.

Community Interest Companies (CICs) certainly have their place within the sports sector. For example, where there’s a community interest rather than a charitable purpose, or where greater commercial freedom is sought (for example, the board of directors being remunerated).

However, I have noticed that some organisations quickly set up as a CIC only to later realise that a CIC is not a charity. This matters because CICs are not eligible for many of the grants and funding streams that are only available to registered charities.

It’s also worth noting that converting from a CIC to a charity is not straightforward. The organisation will still need to apply for charity status with the Charity Commission, which can be a lengthy process.

What’s one trend in sport you think organisations should be preparing for right now from a commercial perspective?

The increase in trading activities. Rising costs, growing demand and reduced funding mean that charities and not-for-profit organisations are constantly looking for new ways to generate income. Sports clubs should therefore be prepared to manage trading activities properly and in compliance with the rules that apply to them.

Examples of this include:

• Charities carrying out trading that isn’t directly related to their main charitable purpose. A common example is a football club running a bar or catering facilities
• Community Amateur Sports Clubs (CASCs) approaching the £100,000 annual threshold for income from non-members. A common example is tennis clubs offering padel (and tennis) courts for public hire. With padel being the fastest-growing sport in the UK, CASC-registered clubs with facilities to offer padel courts to the public can quickly approach this threshold. It’s a good problem to have, but one that needs careful management
• A similar issue arises where a charity sports club’s stated purposes don’t cover a new activity – for example, a football club converting one of its pitches into a padel court to generate income.

As a result, sports clubs should carefully consider setting up a separate trading company to handle commercial activities that fall outside their main purposes.

Finally, away from work, what sport do you follow most closely?

I find that watching and closely following golf encourages and motivates me to enter competitions, experience new courses, play more golf and take on risky shots (beyond my capability).

I’m particularly moved by the conversations which take place on the golf course, not just from a networking perspective but from often starting a round as strangers and leaving as friends (or rivals, as the case may be).