Investment funds in Spain (third-party ownership, TPO)

Transcription

1 Investment funds in Spain (third-party ownership, TPO) 1. Over the last ten years, investment funds have proliferated enormously in Spain. Before investment funds, there existed, on a smaller scale, the ownership of rights by the agents of some footballers, almost exclusively South American. These agents ceded a football player's federative rights, with the option of buying him for the club. 2. But the proliferation of investment funds in Spain may have two causes: - on the one hand, the economic crisis currently suffered by clubs, combined with the financial crisis that has meant the unavailability to clubs of finance from banks, so they have to have recourse to investment funds. -on the other hand, the management of Spanish football has led to other large leagues that ten years ago were at the same level of international competitiveness, such as the English league, have been growing at a far higher rate and are currently out of reach, while other competitions, mainly the German and Italian ones, are growing at a far higher rate and currently have a higher turnover than the Spanish League. 3. This last factor has three results: -valuable Spanish football players depart to join those other leagues,

2 - the failure of clubs, with the exception of Barça and Madrid, to sign up high-level football players, leaves a possibility for other football players who are there to be exploited or who have been exploited and still have an important economic renown, making the funds see Spain, the Spanish League, as a good shop window for such football players. 4. How TPOs work in Spain In Spain, the ownership by third parties of the economic rights of football players works through the following persons: - Through investment funds - Through presidents or managers of clubs (investment companies or funds) - Agents when the football player is a free agent. These are the figures who operate in Spain. 5. The current situation in Spain. Absolute freedom of action in Spain without any limitation, nor any obligation to notify these ownerships to any register. For that reason, we do not know the scope and proportion of this figure, knowledge of which comes through daily work with football players and agents, as well as through the press.

3 POSITIONS IN SPAIN REGARDING INVESTMENT FUNDS AFE. The position of the AFE in this respect is clear. TOTAL AND ABSOLUTE PROHIBITION OF THE FUNDS. - they interfere with the employment relationship. In every case, third parties have an interest in ensuring that a contract signed between a club and a football player does not continue to its conclusion and is not complied with, in defiance of the Civil Code. - the investment funds are producing an inflation in the transfer prices for football players, injecting money that football does not produce, and creating a bubble that disinherits the clubs. - in some cases, investment funds impose very sizeable economic penalties on clubs if a football player is not transferred, which means that, without wishing to on some occasions, they have to put pressure on the football player to effect a termination and transfer. - ownership by agents is prohibited by FIFA, but it is hidden via companies, so a conflict of interests exists between a football player and his agent. - The presidents and managers of clubs have a direct influence on their clubs, which means they give priority not to the interests of football but to their own.

4 6. RFEF. Is totally against investment funds, having made decisions in its executive committee and board of directors for its prohibition, having amended its regulations, but currently awaiting its approval by the Supreme Council for Sports (CSD), Government of Spain. Text of the approval: 4. For the registration or renewal of football players, clubs must be in possession of the economic rights deriving from them, besides their federative rights, throughout the period of validity of the contract and/or licence. In accordance with the foregoing, the economic rights deriving from the federative rights shall be in the sole and exclusive ownership of the club for which the football player is registered. 7. But it establishes two very important exceptions for the clubs: a) When the registration refers to football players transferred from another club. In such a case, the economic rights derived from the federative right shall be retained by the transferring club. b) When the registration is derived from the definitive transfer of the football player, and a percentage of the price of

5 a future transfer of the football player has been agreed as a consideration in the transfer contract. Therefore, the position of the RFEF is clear in this respect relying on the consensus of AFE for drawing up the amendment mentioned. 8.- Position of the LNFP The LFP accepts the activity of the TPOs on football players who play in Spanish clubs, but wants these to be regulated. In the talks held during the last negotiation of the collective agreement, the AFE put the situation of the investment funds on the table. The LFP put on the table a proposal to regulate the funds that the AFE did not accept, work was done on it but we did not come to an agreement. Personally I am happy with those negotiations, given that the proposals made by the LFP during those negotiations on the proposal that appears to be being worked on now contain considerable differences, limiting its regulation much more. I believe that the reasons, at least some of them, made them think. Initial proposals: Prohibition of operations when the football player is a minor Prohibition on the acquisition of more than 80% of economic rights A maximum of 12 football players in the first team.

6 9. Prohibited clauses imposing an obligation of: Selection of football player Temporary transfer of the player Definitive transfer + the TPO deciding the level of the transfer amount Extending or shortening the contract period 10. Subjective prohibitions were also agreed on: - When the TPO is participated in, directly or indirectly, by a director or member of the club's board of directors. - When it is participated in by a shareholder of the club who possesses more than 5% of the share capital of the company. - If the fund is participated in by the agent of the football player. The creation of an obligatory register for all these operations is also proposed. There are three slides missing Finally to comment that the only proposal on top of the table and awaiting approval by the Government is the amendment of the Regulations of the Federation with the proposal on the prohibition of the TPOs, approval that remains paralyzed by the Secretary of State for Sport since he has understood that the topic was not sufficiently debated.

7 As you can check, the Secretary of State appears to be unaware of the years that the RFEF, the League and the AFE have spent in Spain debating investment funds; the Spanish Association of Football Agents is also in favour of the prohibition of TPOs. Many thanks