Brazilian clubs fight back in third-party ownership debate

26 Apr 2013

The debate over the subject of third-party ownership (TPO) in football has taken a fresh twist with a group of Brazilian clubs claiming that a move to outlaw such practices would negatively impact their financial status.

The 21 clubs, which includes reigning Campeonato Brasileiro Serie A champion Fluminense, along with Flamengo, Internacional and Santos, have sent an open letter to FIFA expressing their concerns. The clubs’ move comes after UEFA general secretary Gianni Infantino last month stated that the controversial practice of TPO has “no place” in football. Infantino said that European football’s governing body is against TPO due to four key factors, including its potential impact on financial fair play regulations. Along with the English Premier League, TPO is currently outlawed in France’s Ligue 1 and in Polish football. FIFA says it is evaluating the “complex matter,” while UEFA has maintained it will seek to introduce its own ban if world football’s governing body fails to take action. A European Commission report was released in February examining the possibility of regulating TPO under European law. The European Club Association (ECA), which represents 207 teams on the continent, also debated TPO at its recent general assembly but said there was “no unanimity” amongst members regarding a complete ban, adding that further talks will be held over the implications of such a move. TPO is said to be a US$3 billion-a-year market and is common practice in southern Europe and South America.

The clubs said in the letter: “The ban – as proposed by UEFA – could impact the finances of the Brazilian and South American clubs negatively, as well as the flow of the international transfers of players between South America and Europe, not to mention the problems that would arise in case the contracts currently in full force and effect (which are in line with national legislations and thus subject to legal protection in favour of investors) needed to be, prima facie, annulled with immediate effect. The Brazilian and South American clubs cannot remain silent in relation to this adverse scenario, otherwise they will once again be affected by an unilateral and sudden change of rules, implemented without their involvement, exclusively promoted by UEFA even without – it is worth to highlight – reflecting an unanimous opinion of European clubs.”

Most clubs in Brazil sell the transfer rights of players to investors as a way to raise money and strengthen their squads, Daniel Cravo, a lawyer representing Internacional told Bloomberg. Jochen Loesch, president of international business at the Traffic Sports agency, added that about 90% of players in the country’s top league “are somehow linked to investors”. Traffic has invested in excess of US$75 million in the rights of about 60 players since it was founded in 2007. The English Premier League has been one of the forerunners in the fight against TPO, with chief executive Richard Scudamore last month comparing the practice to “indentured slavery”. Cravo said: “The claim that this is player slavery is just a fallacy, it’s not true. The player is in control of his destiny.” The Brazilian group said that it has formed a four-member commission to discuss the matter further, with another meeting scheduled for May 2 in Sao Paulo.