Marcos Rojo pursuit highlights major issues with player ownership

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Widespread reports are suggesting that Manchester United have made an offer of €20 million for Sporing Lisbon defender Marcos Rojo.

Van Gaal, who believes that the 24-year-old will be the perfect fit for his new 3-5-2 system, has targeted the versatile defender who was named in the World Cup team of the tournament.

On the surface the deal looks simple; big European club offer a large sum of money for a player outside of one of Europe’s best leagues. However, similarly to United’s turbulent pursuit of Carlos Tevez, third party ownership complications look set to frustrate both the clubs, the player and Rojo’s co-owners, Doyen Sports.

The complications and frustrations are reflective of the growing issues over third party ownership that are getting increasingly worse.

Third-party ownership

The Premier League banned the 'third-party ownership' of footballers in 2006 after the economic rights of Tevez and his fellow Argentinian Javier Mascherano were discovered to be owned by two offshore companies when they signed for West Ham.

The practice by which investors, often operating anonymously via tax havens, purchase stakes in players and in turn gain a share of the player’s transfer fee when they are sold has been compared by Premier League's chief executive, Richard Scudamore, to: "indentured slavery".

Players' economic rights being 'owned' by investors shocked English football, but it is common practice in eastern Europe, Portugal and Spain, and widespread in South America, notably Brazil as evidenced by Neymar’s contentious move to Barcelona last summer.

The practice by which investors, often operating anonymously via tax havens, purchase stakes in players and in turn gain a share of the player’s transfer fee when they are sold has been compared by Premier League's chief executive, Richard Scudamore, to "indentured slavery".

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The investors

A report in August by the consultants KPMG found that 27%-36% of the players in Portugal's Primeira Liga are owned by third-party investors with the number also 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.

West Ham were ultimately fined £5.5 million for not disclosing all the documents relating to the Tevez and Mascherano transfers, and a series of court appearances followed, before the Premier League clubs agreed to prohibit third-party ownership of their own players.

In November 2012 Scudamore strongly lobbied Fifa to ban third-party ownership across world football, a stance with which Fifa's football committee agreed.

Uefa President Michel Platini has outspokenly condemned third-party ownership and promised to act should Fifa, which has commissioned studies on the practice, fail to ban it.

Uefa's stance

In December, Platini said: "We cannot accept that players are owned by an agent or an entity, or financial institutions. It is hard to understand that footballers, who have battled so much to be independent of clubs, are now controlled by third-party funds. I do not accept that. I am going to fight with all my strength against that."

Fifa's rules prohibit third-party influence on clubs' employment and transfers, but still allow third-party investment.

The two studies commissioned by Fifa are seeking all the facts about the practice, "integrity considerations", and the different regulations worldwide, before concluding their stance on the issue and deciding what action they wish to take.

Uefa says European football transfers amounted to €3 billion last summer, and of that figure a whopping €900 million, was paid to agents.

Platini is not alone in his objection to third party investment with Gianni Infantino, Uefa's general secretary, saying that that €900 million figure did not include the money going to third parties, which he argues is a short-term, often damaging, fix to clubs' financial difficulties even pledging to fight alone and ban the practice in Europe if Fifa are too slow.

Infantino said: "This situation cannot continue. What matters is that clubs have a stable future. Uefa takes issue with all investment funds related to third-party ownership of players, [where] for instance, 30% of the transfer fee goes to the agents. That's great for them, because they have worked well. But we have to have financial transparency, it must be clear where the money is going. It is a matter of integrity.

"There are players and managers that belong to an investment fund and are at different clubs, clubs that are competing against each other. That endangers the integrity of football. Obviously everyone wants to earn money, but we have to protect the integrity of our game."

Issues at hand

It is understandable why some clubs are seeking the financial backing of third-party investment, however, more often than not the investment papers over the cracks of the club’s financial issues rather than tackling the root of their problems.

The Tevez/Mascherano and Neymar situations are just a couple of examples of how ugly these third party ownerships can become with court cases and vast financial packages seemingly the only way to resolve the disputes that arise from these complex ownerships.

United are finding this out the hard way in their pursuit of Rojo, however, Uefa and Fifa need to look at the bigger picture and realise that these third party ownerships have the potential to damage players’ careers and the financial stability of clubs all around the world.

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