FIFA Probes $56 Million Soccer Player Trading Operation

Soccer’s ruling body FIFA will investigate an arrangement in which Brazilian players including the Porto striker known as “Hulk” are traded to European clubs via a Uruguayan team for which they never appear.

Player agent Juan Figer arranges for Club Atletico Rentistas, one of Montevideo’s smaller teams, to sign his clients and then loans them to a higher-profile club, according to Rentistas President Mario Bursztyn. The transfer fee when the player is traded is redirected to a company owned by Figer called Lamico, Bursztyn said in an interview.

Bursztyn said his club gets a “fairly large” monthly retainer fee from Figer in return and the arrangement is “totally legal.” Figer, who is a licensed agent, follows all the rules of his profession, his spokesman Jose Aparecida Miguel said via e-mail. Zurich-based FIFA, which regulates international transfers, said in an e-mail its disciplinary committee will look into the matter after being contacted by Bloomberg News.

FIFA is trying to improve regulation of the $2.5 billion soccer transfer market and in 2010 set up a unit called Transfer Matching System GmbH that makes it compulsory to disclose the bank details of where transfer money goes via an Internet-based system. At the time, the unit’s general manager Mark Goddard told reporters soccer was “the last area of the commercial world where large amounts of money can be moved without oversight or regulation. It’s been a jungle out there and that’s about to change.”

Third-Party Rules

Under FIFA rules introduced in 2008, third parties are banned from interfering in trades between teams. The ruling body, which is responsible for overseeing as many as 20,000 international trades a year, also prohibits agents from taking a portion of transfer fees.

A FIFA official said it opens disciplinary cases when alerted by national federations, clubs or news reports to potential rules breaches. The official declined to be identified in line with the organization’s policy. Goddard wasn’t immediately available for comment.

Figer’s agreement with Rentistas dates back to 1999, according to interviews the Sao Paulo-based Uruguay native gave to a Brazilian parliamentary inquiry into soccer in 2001. At least $56 million of deals have gone through Rentistas, according to Bloomberg News calculations.

Figer’s system allows him or other investors to buy the transfer rights of upcoming players via Rentistas and then wait for their transfer market value to rise while they’re on loan in Brazil, according to Amir Somoggi, director of a sports unit at auditing firm BDO International Ltd.’s office in Sao Paulo.

Italian Transfers

A total of $15.7 million from the transfer of two Brazilians, Alberto Valentim do Carmo Neto and Warley Silva dos Santos, was paid to Rentistas by Italy’s Udinese in 1999 and 2000, according to a 2001 report by the Italian soccer federation about South Americans using forged European Union passports. In 2000, France’s Rennes paid $7.5 million to Rentistas for another Brazilian, Lucas Severino, according to testimony by Figer to the parliamentary inquiry published on the Brazilian senate website.

Rentistas got 19 million euros ($25 million) from trading 90 percent of the rights of Hulk, whose real name is Givanildo Vieira de Sousa, to Porto in two tranches in 2008 and 2011, and 6 million euros for 75 percent of the transfer rights of forward Walter da Silva in 2010, according to stock-market filings by the Portuguese team.

Hulk played for Japan’s Tokyo Verdy until a few weeks before he joined Porto, while Walter was at Internacional de Porto Alegre, a Brazilian team. Figer is one of the agents of Hulk and Walter, Figer spokesman Miguel said.

Hulk is in Porto’s 18-man squad playing Manchester City in the first of a two-game Europa League round-of-32 game today.

$600,000 Budget

Bursztyn said Rentistas has an annual budget of $600,000 and doesn’t enrich itself from its agreement with Figer or it “would be better than Nacional and Penarol” instead of fighting to stave off relegation from the first division. Montevideo-based Nacional and Penarol are Uruguay’s biggest and most successful teams.

Rentistas doesn’t have a website and in 2007 a judge suspended one of its games when drains flooded in the forecourt of its 10,000-capacity stadium.

Bursztyn said that “many years ago” Brazilian government officials had travelled to Montevideo to make inquiries about the arrangement, although he wasn’t aware of FIFA ever contacting the club about it.

Investment Funds

Player agents first began to buy shares of transfer rights from cash-strapped clubs in Brazil in about 1998, Leo Rabello, a Rio de Janeiro-based player manager for 27 years, said in an e-mail. Figer, who is in his late 70s, was the first FIFA-registered agent in Brazil, according to the parliamentary inquiry. There are now 337 agents in Brazil licensed by national soccer authorities, according to FIFA’s website.

The practice of investing in transfer rights has since spread to investment funds managed by sports marketing agency Traffic Sports and the parent company of food retailer Sonda Supermercados Ltda.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE