Coming to Michel Platini’s backyard, third party ownership like structures
UEFA might object to third party ownership with Carlos Tevez’s odyssey being upheld as the archetype of such partnerships exerting undue influence on clubs to sell. But such ownerships are coming to Michel Platini’s backyard as financing becomes harder to come by from traditional banking sources. In the most recent instance, Argentinian defender, Marcos Rojo’s arrival at Utd was touch and go as Malta based Doyen Sports Investment, Ltd claimed a 75% stake in his transfer rights forcing Sporting Lisbon to stall and accuse CEO, Nelio Lucas of “illegitimately pressurizing” them. The club finally rescinded that agreement and sold Rojo to Utd for €20m. Doyen Sports is now suing the club for breaking the contract.
Such arrangements are already commonplace in Spain, Portugal, and Belgium. To circumvent UEFA’s third party ban, such sports funds focus on earning a percentage of the huge mark up in transfer fees on top of interest. Such accounting allows the club to declare the players as assets without falling afoul of FFP restrictions. So far, the FFF has refused this variation in third party financing but with the exception of PSG and AS Monaco (surprise, surprise), the rest of the French Ligue have shown an openness to such financing. The $4bn transfer market is a treasure trove and with no sign but up, its unsurprising investment funds are circling around for a share.
“The transfer market figures are terrific,” Laurent Pichonnier, a partner of Luxembourg-based Fairplay Capital, which is seeking to raise as much as €150m ($193 million) to invest, said by telephone. “If you get one-third of the transfer, your return is booming.” Other partners, the aforementioned Doyen Sports which is already in the pipeline for their first such investment in a French club in the January transfer. They already have an extensive track record in La Liga doing €100m of business with Aletico Madrid. Similarly, R2 Asset Management has already employed the model investing €65m across Europe including France.
Ray Ranson, CEO of R2: The French league “realizes it’s a financial transaction and there is no ownership of anything,” Ranson said. “There is no influence on clubs.”
If this becomes the norm, Michel Platini can kiss his FIFA grand poobah aspirations goodbye.