With every single day UEFA’s Financial Fair Play (FFP) regulations unfurl ever greater in our footballing consciousness. Clubs across the continent will be required to break even by 2015, which for certain Premier League clubs looks a big ask. But elsewhere, the European football governing body have moved to level the playing field even further on the issue of third-party ownership, but will its effects be felt further afield?.
England and France are currently the only nations to outlaw such arrangements, with other European clubs such as Porto regularly utilising third-party investors as a way to help attain players. This gives them an advantage as it essentially means they can purchase talents who they would not otherwise be able to afford. UEFA’s whole premise for FFP is that clubs should not live beyond their means. With that in mind, upon lobbying from the English and French, they have moved to close a loophole in regards to third-party ownership, without making it illegal.
The new regulation means that clubs who sell a player of whom they only own, for example, 40% of the economic rights will not be able to count the portion of the transfer fee that they receive when balancing their books. Only revenues from players sold which the club had full ownership over can count towards a balanced budget for FFP.
However, the impact in South America, where third-party ownership is almost inherent in football, is likely to be negligible. The clubs need it to be competitive and when it is all above board it is beneficial to them. There would have been little chance of Neymar staying at Santos until the 2014 World Cup had it not been for external involvement in paying a part of his wages, now the club will have their newest idol for the foreseeable future.
In order to avoid such restrictions, it will likely lead to the creation of more links akin to Manchester United’s affiliation to Desportivo Brasil. The players at Desportivo are trained from a young age with their rights solely owned by sports media agency Traffic. United have set transfer fees in place with the company, based on player positions, in which they can acquire the 100% ownership of the player. This enables the training of players under their own methods along with easiness to track their progression. More clubs across Europe may look to replicate this and begin cultivating talent at an earlier stage.
But money spent on purchasing a small percentage of a players economic rights from South America could be considered as being thrown into the abyss. Yet the effect on European clubs may well still be minimal as it would be no different to paying a fee to loan a player. They would only need to pay for the rights owned by the parent team, assuming it was believed to be beneficial by the other parties involved, and therefore doing little to damage the prospects of a South American player moving to Europe.
This is enhanced in the point that if a club already own the complete economic rights to a player, they will still be able to sell off a portion to increase liquidity. While this may not be allowed to be counted on the books, it enables them to raise funds to immediately expend on another player, thus doing little to actually reduce the benefits of external involvement.
It was the decision of the English and French to outlaw third-party ownership. While there may be the odd horror story of a deal gone wrong (e.g 75% of Ronaldinho’s Flamengo wages being paid externally), if it is managed correctly then it can be beneficial. Such a change in Europe is unlikely to have the effect of changing attitudes in South America where third-party ownership, by and large, is seen as a useful tool.
What are your views on third-party ownership? Let me know on Twitter @thwebber
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