Soccer’s world and European governing bodies want to ban the purchase of stakes in player-trade rights, an investment that earned a 64 percent return on a single bet for a fund managed by Banco Espirito Santo SA.
The bets on younger players, which began in South America in the 1990s, are spreading to Europe’s $3 billion transfer market as clubs seek alternative funding amid tighter bank lending. According to Bloomberg calculations, a 4.4 million-euro ($5.4 million) purchase of 20 percent of the rights in Benfica playmaker Angel di Maria by Lisbon-based Espirito Santo’s fund in 2009 will yield a profit of as much as 64 percent after he joined Real Madrid for as much as 36 million euros in 2010. The money will be paid over several years.
World ruling body FIFA, which currently allows so-called third-party ownership provided investors don’t interfere in the transfer market, sees no benefit to soccer from the operations, according to Geoff Thompson, chairman of its Dispute Resolution Chamber. FIFA wants the practice banned.
“We don’t want third-party ownership, to be frank,” Thompson said in a phone interview. “FIFA is trying to get rid of the practice but it’s a matter of resources. It doesn’t do anybody any good and certainly doesn’t do the clubs any good or indeed the players.”
Thompson said the organization will discuss the matter at a meeting in July. The English Premier League and France’s Ligue 1 have already prohibited it, and European ruling body UEFA is consulting stakeholders as it considers taking action. UEFA may ban clubs that sell transfer stakes from its Champions League and Europa League competitions, General Secretary Gianni Infantino said in an interview in Budapest last week.
In Spain, Real Zaragoza used money from investors, including its owner Agapito Iglesias, to sign goalkeeper Roberto Jimenez from Benfica for 8.6 million euros last year, Chief Executive Officer Francisco Checa said. It has helped the team stay competitive at a time when it doesn’t have funds of its own to sign players, Checa added. Jimenez didn’t allow any goals as Zaragoza beat Getafe 2-0 on May 13 to avoid relegation from Spain’s elite La Liga.
Some of the biggest returns have been made by player agents in South America. Sao Paulo-based Juan Figer may have earned as much as 19 million euros when Porto acquired 90 percent of striker Hulk’s transfer rights in two tranches in 2008 and 2011 from Uruguay’s Club Atletico Rentistas, according to fees the Portuguese club disclosed in regulatory filings.
One of Montevideo’s smaller teams, Rentistas signs Figer’s clients such as Hulk without fielding them in its team and redirects fees to a company owned by the agent called Lamico when they are traded, according to Rentistas President Mario Bursztyn. Rentistas gets a monthly retainer fee under the arrangement. Figer’s spokesman Jose Aparecida Miguel declined to comment about the process.
In Germany, Hanseatisches Fussball Kontor GmbH runs a fund owning stakes in the transfer rights of more than 20 lower-league players. Kai-Volker Langhinrichs, managing director of Hanseatisches Fussball, said by phone on Feb. 28 that he’s monitoring whether FIFA makes any change to its regulations on transfer-rights ownership.
The Schwerin, Germany-based company signs a contract with each of the clubs it does deals with under which it agrees not to interfere with trades, thus complying with FIFA’s existing rules, Langhinrichs said.
The FTR 1 Fussball fund managed by Hanseatisches raised more than 1 million euros after promising returns of 138 percent over four years to investors. Hanseatisches Fussball also opened a second fund, Langhinrichs said. The model is attractive to many second- and third-division teams, which are struggling for revenue because of lower sponsorships and ticket sales amid slow economic growth, Langhinrichs added.
Thompson said FIFA’s rule on interference in the transfer market is difficult to police and he believes many investors do have a say when players are sold.
“I’d like to see it totally eliminated from the game,” he said. “If you haven’t got the appropriate police force, you can’t enforce it.”