European Soccer Body to Probe Player Funds’ Effect on Premier League Teams
European soccer’s governing body UEFA is to investigate whether selling player transfer rights to investors discriminates against Manchester United and other teams in England’s Premier League, where it’s banned.
Clubs in Portugal can raise funds by selling part of the rights to future transfer fees and the practice is spreading to Spain and Turkey as teams are refused credit by banks. Benfica, which leads United in their Champions League qualifying group, got 44 million euros ($59 million) from the rights of 24 players since 2009 sold to a fund managed by Banco Espirito Santo SA (BES), according to club filings.
UEFA plans sanctions against European clubs that fail to meet so-called financial fair play rules from 2014. The issue of selling transfer rights will be investigated by Nyon, Switzerland-based UEFA’s club licensing commission early next year, Andrea Traverso, the ruling body’s head of club licensing said in a telephone interview.
“The idea is to see whether these kind of practices will have an effect on” financial fair play, Traverso said. “And if necessary what kind of rule would need to be put in place to mitigate any effect that is not desired.”
UEFA is pushing for teams to break even and will allow owners to cover a maximum loss of 45 million euros for the 2013- 14 and 2014-15 seasons together. Clubs risk being banned from the elite Champions League if they don’t comply.
Porto (FCP) became one of the first European teams to sell shares to third-party investors in 2004 after losses of 58 million euros the previous three years. After raising as much as 6 million euros, it went on to win the Champions League that year with Jose Mourinho as coach.
The Premier League banned outside ownership of transfer rights after it complicated striker Carlos Tevez’s move to Manchester United in 2007.
“We are concerned that third-party ownership is permitted under the current financial fair-play regulations and have opened discussions with UEFA,” said a Premier League spokesman, who declined to be named because of league policy.
Since last year, Sporting Lisbon and Turkey’s Besiktas have sold the rights to at least nine players to Quality Sports Investments Ltd., a Jersey-based investment fund, team filings show.
Real Zaragoza, which is in administration, financed the signing of goalkeeper Roberto Jimenez in the offseason with as much as 8 million euros from an investment fund it declined to identify, officials said. In Germany, billionaire investor Klaus-Michael Kuehne paid 12.5 million euros in return for a stake in five players.
English authorities may have to reconsider the rule if UEFA doesn’t ban the practice, Daniel Geey, a sports lawyer at Field Fisher Waterhouse LLP in London, who’s written a report on the subject, said in a telephone interview.
English teams are penalized twice, he said. Rivals can cut their transfer outlay by part-financing deals with investors as well as receiving a revenue boost from selling the rights to under-contract players.
“The Premier League will look long and hard at the rule bearing in mind the consequences of financial fair play for its biggest clubs,” Geey said.
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