Chelsea & Jose Mourinho Probed in Third-Party Ownership of Players

Posted by As soon as this hot news broke the headlines this week, it shook English Football this week. It is expected that English Football League and Chelsea would be scrutinized by UEFA over these allegations.

Here is article about this news, which was posted on SWOL this week:

In one of the best investigative football journalism,  The Guardian just released a report today that links Chelsea club’s to third-party ownership of players, including co-ownership with Jose Mourinho’s agent.

Just as Match-fixing is not yet cleaned up in world of Football, despite UEFA and FIFA’s dislike, third-party ownership of players in Europe is still in practice it seems.

“Third-party ownership” of footballers by Premier League was banned in 2006, after controversial transfer of third-party owned Carlos Tevez and Javier Mascherano to West Ham. Soon after the revelations, UEFA banned “third-party influence on clubs’ employment and transfers”, yet third-party investment is still legal in Europe.

A recent example of this shady business is Barcelona President’s transfer deal between FC Barcelona, Neymar, Neymar’s agent and Neymar’s third-party owner in Brazil,N&N, which is owned by Neymar’s father and left player’s old club Santos at clear disadvantage for just receiving €17.1M. Not to mention, FC Barcelona deliberately announced a diminished version of Neymar’s transfer costs at  €57.1 while the total cost, later admitted by Barcelona officials at Court was €86.2m.

A report in August by the consultants KPMG found that staggering 27%-36% of the players in Portugal’s Primeira Liga are owned by third-party investors, and the practice has “greatly increased” in Spain, particularly at financially struggling clubs. Such clubs argue that selling a share in a player to investors brings money up front and enables them to keep the player for longer, before sharing the proceeds with the investors when the player leaves.

That points us to Chelsea’s links to third-party ownership of players.  In case the Guardian Report sounds complicated-because shady business and explanation of its purpose is not meant to be simple after all- here are summary of new findings:

– Chelsea have set up funds in tax havens that are about “sports investments”.
– Co-operation and co-ownership with Jose Mourinho’s agent, Jorge Mendes.
– In practice these funds buy economic rights in players, i.e. third-party ownership deals, in territories where third-party ownership is allowed (in England it is not).


How these benefit Chelsea:

1. Share of the transfer fee if a player they partly own is sold (all of his rights). For example, it appears that when Norwich bought Van Wolfsvinkel, Chelsea got part of the transfer fee because they had bought 50% of his rights.

2. Capability to buy such players cheaper to Chelsea. If they already own 50% of a player coming to Chelsea and the transfer fee would really be 10m, they have to pay only 5m.

3. Capability to prevent the sale of players they partially own, in some cases.

he fact that struck me most was that two of the “sport investment” firms associated with Chelsea Club’s third-party ownership of players, are originally based out of New York and Los Angeles. Two investment firms that have no experience in football management, but can raise capital to own a football player in Europe partially or 100% and would trade those players like equity market stocks: Trading the player to another club when there is a huge profit for the investment firm, and refusing to trade, when the competing firms or clubs are bidding on the player.

If this is the way beautiful world of football is headed, we may need to wish for a Market Crash so that only valuable assets; talented players and financially-viable clubs in this case, remain on the pitch.

Originally posted on:–jose-mourinho-probed-in-thirdparty-ownership-of-players/32645

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