Sport is not a priority for the state

Almost four-fifths of professional athletes in team sports play football or ice hockey (871 out of approximately 1,100 professional athletes in 60 clubs). It is therefore logical to expect competent institutions (ministries, members of the Slovak National Council, etc.) to take into account the proposals of these two associations and of professional hockey players and footballers when potentially addressing the critical situation that may arise after January 1, 2019.

The so-called social contribution holidays negatively affect the social situation of professional athletes because since January 2016 social contributions have not been paid for professional athletes as employees. For three years they have been unable to receive sickness benefits during sick leave, they have not been accident insured (as employees), if a female athlete got pregnant during this period, she would have no entitlement to maternity benefits, and for three years these periods do not count toward calculating old-age or disability pensions… Based on these facts, the lawyers of the Union of Professional Sports (UčPS) argue that “extending the social contribution holidays is not a balanced solution,” which is generally agreed upon by representatives of the Slovak Football Association (SFZ), the Slovak Ice Hockey Federation (SZĽH), and player associations.

According to the SFZ’s statement, “postponing any serious problem, which the current somewhat unlawful situation is, is not a systemic solution but rather a deepening of the problem. Professional athletes deserve the status they are entitled to.”

According to Jozef Tokos, advisor to the Union of Football Professionals, ministries and state administration bodies have also not acted in accordance with the so-called competence law in this matter. The law states, among other things, that “ministries and other central state administration bodies examine issues within their competence and analyze achieved results. They take measures to resolve current questions.”

Tokos notes that more than 2.5 years of the transitional period is a sufficiently long time for the central state administration body for sport to act and asks whether they “have taken measures? Have they arranged the proper legal regulation of these matters?” Clearly, these questions are rhetorical.

The president of the Slovak Ice Hockey Federation, Martin Kohút, says, “If we want to have professional sport in Slovakia, we must create conditions for it. The participation and results of Slovak athletes in team sports at the Olympic Games are only an unflattering reflection of the care and support provided to athletes.”

From the ongoing discussion among the involved parties at official and less formal meetings, three possible solutions (or “solutions”) to the current situation have essentially emerged. The first, which means postponing the problem, is to delay the effectiveness of the law by one or two years; the second is to fix social contributions based on contracts for professional sports performance at some upper limit (for example, based on the minimum wage); and the third, although the slowest but most systematic, would be to increase the revenues of professional clubs so that they are able to cover the increased costs of their employees in accordance with European legislation.

Representatives of the Slovak Football Association (SFZ) prefer a combination of the second and third alternatives — according to their statement, the increase in club revenues could be funded by a so-called super deduction or revenues from state budget earnings on sports betting. Until the state resolves the increase of club revenues, “the contributions should be fixed at some upper limit, and the state should cover a significant part, if not all, of the payments.”

Martin Kohút supports increasing the revenues of professional clubs based on their success. “At the start, it might be enough to return to professional clubs the funds by which their costs will increase due to the transition to employment contracts. That would solve a large part of the problems, and given the number of professional athletes in Slovakia, our social system can definitely handle it,” says the hockey president.

Oliver Pravda (SIHPA) considers increasing club revenues the only correct solution. According to him, “It is in society’s interest to have sport at a high and competitive level, and therefore the state must create conditions for clubs to be able to pay what the state demands from them.” According to Pravda, the usual ways — sponsorship contracts, broadcasting rights, ticket sales, and advertising partnerships — cannot generate as much as would be needed for a country of 30 million inhabitants like Slovakia. He proposes tax assignment similar to Hungary or a super deduction.

Jozef Tokos says that increasing professional clubs’ revenues is only indirectly related to the social contributions issue. He considers urgent the resolution of social contribution payments, especially from January 1, 2019. Among the proposed solutions, he leans toward paying contributions comparable to the status of self-employed persons (SZČO) and recommends adopting measures like those in English or Dutch football, where professional athletes save part of their gross income for a pension paid immediately after their career ends — essentially a special supplement to the third pillar.

Among the various proposals to increase club revenues, suggested by former minister of labor and sports official Jozef Mihál, the football and hockey representatives agreed on several proposals, especially sports vouchers and a systemic solution for sponsorship.

According to Oliver Pravda, changes in sponsorship are necessary: “A sponsorship contract aims at the right goal and is a great thing for everyone, but bad legislation means that in practice sponsorship contracts are unfortunately hardly ever used,” says the SIHPA representative.

Unlike others, Jozef Tokos warns that with super deductions, “sports fans might be pleased with the benefits, but on the other hand, proposals of this type must be implemented so that they become systemic solutions that do not disrupt the simple and transparent tax system or public finances.”

Martin Kohút supports “all reasonable solutions to create conditions and motivate youth to one day become successful Slovak representatives,” but ends skeptically: “Anything is better than the reality we have today.”

The SFZ’s position on the offered solutions concludes that while they can bring positive incentives in the short or long term, “it is absolutely necessary that the proposals, which were talked about and discussed already before the adoption of the sports law, start being seriously negotiated at the highest level because time is flying. But we believe that the sports movement feels that sport is not a priority for the state,” say the representatives of the largest sports association.

Despite critical words about the current situation, the representatives of the two largest sports associations do not share the same view on the proposal to postpone the effectiveness of the law and thus extend the current legal situation by several years.

According to Jozef Tokos, this option does not suit professional athletes, “but it is definitely a better solution than inactivity, which would cause major problems especially for clubs.”

The SFZ considers the postponement unsuitable for professional athletes, “since it only prolongs the current state where athletes are in a sort of vacuum outside the social system, which is disadvantageous for them from a social security point of view.”

The president of the Slovak Ice Hockey Federation, Martin Kohút, does not see the situation as dramatically: “We do not have political responsibility for the adopted measures, we will accept any solution adopted at the parliamentary level. Professional hockey clubs are already learning to think differently, they will adapt and find solutions. The question is whether these solutions will also benefit the entire political representation of Slovakia and its goals.”

According to Pravda, postponing the social contribution holidays would be “an acceptable solution provided clubs comply with the sports law.” However, according to Pravda, this is not happening in hockey, and the law is not being respected. “Due to systematic and long-term violations of the law, clubs are asking the legislator to extend social and tax holidays, and the public is being led to believe that extending social contribution holidays is the only acceptable solution. If the state approves this, it will signal to all companies and people living in Slovakia that they can do whatever they want and nobody has to follow laws. It would be a failure of the state and a dangerous precedent,” says Pravda.

Time is running out, team sports competitions are starting, and the current situation has little to do with a rule-of-law state. Will sport be the first domino to fall? Or will it also not stick out from the crowd?