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The DNACG: composition, missions and operation

Published on 08/24/2010

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What is DNACG?

In accordance with Article 132-2 of the Sports Code, as well as the specific provisions provided for this purpose by the statutes and general regulations of the FFR and the LNR and by the FFR/LNR agreement, the National Directorate of Assistance and Management Control is responsible for ensuring the control of the administrative, financial and legal management of clubs competing in professional championships on the one hand, and federal championships on the other.

Article L. 132-2 of the Sports Code: “Each federation with a professional league creates an organization ensuring the legal and financial control of the associations and companies mentioned in Article 11. This organization is in particular responsible for checking that the associations and companies they have formed meet the conditions set for taking part in competitions organized by the federation.”

The DNACG is an independent body with respect to the FFR and the LNR whose activity is structured around three entities:

The Professional Championship Control Commission, responsible for monitoring clubs participating in championships organized by the LNR (TOP 14 Orange and PRO D2).

The Federal Championship Control Commission, responsible for ensuring control of clubs participating in championships organized by the FFR (federal divisions).

The High Council, which, on the basis of the elements provided by these two commissions, is the only body authorized to impose sanctions against clubs.

Members of the DNACG

The members of the DNACG are appointed for their expertise and for their independence from the clubs controlled, several regulatory provisions providing the necessary guarantees on these two points.

The Higher Council of the DNACG

Fabrice FRICOU

Alain LAJUGIE

Max MARTINEU

Guy MORAUX

The Professional Championship Control Commission is made up of eight members appointed by the LNR or the FFR:

Coordinators

Dominique Debreyer

Jean-Christophe Rouge

Rapporteurs

Bernard AGRET

Jean-Luc BERBION

Alain BURETTE

Philippe DEPARIS

Gerard LANDA

Julien LEGENDRE

Philippe ORAIN

Jean-Guy SICARD

The secretariat of the DNACG (professional sector) is provided by its administrative manager, Mr. Marc LE NERRANT, who is part of the permanent staff of the National Rugby League.

The missions of the DNACG

The DNACG's main purpose is to promote economic fairness in the TOP 14 Orange and PRO D2 championships, in order to prevent the competition from being distorted by clubs incurring costs that are too high to justify the resources needed to finance them.

It is also about contributing to the economic and sporting sustainability of the clubs, which is all the more essential in a period of economic crisis, following, for rugby, a decade of strong growth.

To do this, the roles are clearly divided between the Professional Championship Control Commission and the DNACG Higher Council:

The first instructs the files through the collection of the necessary accounting and legal documents, club hearings and on-site visits. Six of its members, divided into pairs, are each more specifically responsible for five clubs from the two professional divisions. The Commission thus examines and assesses the situation of each club, issues a favorable or unfavorable opinion on the approval of players' contracts, and transmits to the High Council the files likely to justify the application of the sanctions provided for by the regulations. It can also issue supervisory measures concerning the recruitment of clubs and/or limitations on the payroll.

The High Council is competent to pronounce the said sanctions in the first instance, on the basis in particular of the file presented by one or more rapporteur(s) of the Control Commission and after hearing the club for contradictory exchange. It is also guarantor of the procedures defined by the Steering Committees of the FFR and the LNR.

Since the creation of the DNACG in 1999, rugby authorities have also wanted it to be able to provide assistance to clubs, symbolised by the "A" in its acronym. This approach, which was particularly necessary in a period of professionalisation of rugby, remains useful, particularly for clubs promoted from lower divisions. While it is in no way intended to replace the clubs' accounting and legal advice, or their auditors, the DNACG can thus provide support in its areas of expertise.

To carry out its missions, the Professional Championship Control Commission and/or the Higher Council meet physically ten to fifteen times per season for hearings or working meetings. Numerous telephone meetings are also organized in addition.

Finally, twenty to twenty-five visits to clubs each season allow for on-site inspections to be carried out, but also for discussions with the managers and legal, accounting and financial stakeholders (employees or advisors) of the clubs. Finally, the upstream work of the different pairs of controllers on the instruction of the files of the clubs they are responsible for is obviously essential.

Measures and sanctions

In order to carry out its missions, the DNACG may, depending on the seriousness of a club's financial situation or the offence it is accused of, impose a certain number of measures and/or sanctions, with or without a total or partial suspension:

Financial fines,

Blocking of LNR payments or total or partial withdrawal of participation in the French Championship blocking fund,

Limitation of the players' payroll to an amount set by the Control Commission,

Conditioning the conclusion of new contracts and/or player amendments (extension and/or increase in remuneration) on the production of additional documents and/or financial guarantees,

Prohibition on concluding contracts and/or amendments for players, including with players already under contract, or already licensed in the club in question,

Withdrawal of points,

Refusal of promotion to a higher division,

Relegation to a lower division (automatic at the end of the season for any club that has been subject to the opening of receivership proceedings),

Refusal to commit to the professional championship.

All of these measures and sanctions may be appealed before the Federal Financial Commission, which has jurisdiction in this matter.

Reserve fund and payroll cap:

Specific safeguards for professional rugby

In addition to the measures or sanctions that may be imposed on a particular club, all are subject to two additional regulatory obligations:

- Every professional club is required to set up a reserve fund, allowing it to present a net adjusted situation of an amount at least equal to 20% of its player payroll, excluding employer contributions, for the coming season (1) . It is notably thanks to this essential provision that the average level of adjusted equity of clubs has increased considerably since the beginning of the 2000s, both in TOP 14 Orange and in PRO D2.

Any professional club must limit the gross payroll (excluding employer contributions) of players under professional, multi-active or hopeful contracts to a maximum equivalent to 52% of the sum of the products provided for in its forecast income statements on the one hand, and of the closing of the financial year on the other hand. The gross payroll of players includes all remuneration, in cash or in kind, including any image contracts. The products cover both operating income, financial income and exceptional income. If a club does not generate sufficient operating income to "cover" its payroll, its shareholder may, for example, voluntarily or at the request of the DNACG, abandon a current account allowing it to fulfill this obligation.

(1) Transitional provisions, taking into account the context of the economic crisis, provide for the possibility for clubs to reduce the amount of the reserve fund by up to 10% of their payroll. However, this exemption is subject to restrictive conditions regarding the increase in the player payroll of the club concerned. Furthermore, contributions to blocked current accounts (quasi-equity) may also be taken into account on a transitional basis.

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