Third Party Player Ownership of Footballers

The Football Association (FA) has alleged that QPR midfielder, Alejandro Faurlin, was fielded illegally by the Club for the whole of the 2009-10 season due to his registration not being owned by QPR, but by a third party.

Specifically, these allegations are concerned with the existence of an agreement between the Club and a third party in respect of the player’s economic rights, and the alleged failure by the Club to notify the FA of that agreement before the player was registered to play in England in July 2009.

For a football player to play for a professional football team in either England or Scotland his registration must be owned by that Club, therefore meaning that the Club has the ownership right over that players services. In recent years, however, there has been a growing trend of footballers being subject to third party ownership.

Third party ownership is the term which is used to describe the situation whereby a football player is registered to play for a Club, but that Club does not own the player and is not entitled to 100% of the future transfer value. From an economic perspective, the third party will give a Club or player money in return for owning a percentage of a players transfer fee or economic rights accruing from their contract.

It is a particularly common system in South America, and as such has crept into the European game due to the biggest Clubs fighting to sign the large number of high quality players coming out of Brazil and Argentina.

The Premier League first became fully aware of such a practice back in 2007 following the high profile dispute over Argentine striker Carlos Tévez, who had then signed for Premiership Club West Ham.

On 23 August 2006, Tévez confirmed on his website that both he and compatriot Javier Mascherano were signing for West Ham United on permanent deals for £12 million each. Media reports at the time speculated that other Premier League Clubs turned down the opportunity of signing Tévez and Mascherano because of stipulations put in place by Media Sports Investments, who owned both players’ rights.

After an investigation at the end of the 2006/07 season, the independent Premier League disciplinary tribunal fined the Hammers a record £5.5 million for the signing of Tévez and Mascherano as they were found to have been partially-owned by businessman Kia Joorabchian’s Media Sports Investment (MSI) Company. West Ham were not charged at the time with breaching the prohibition on third-party ownership because the rules were not yet then in place.

This decision was widely criticized at the time as many felt the fine was not severe enough; particularly as West Ham were not docked points and debate still rages as to Tevez’s ownership. Their disciplinary case was brought by the Premier League for their failure to supply all relevant documentation in a transfer and acting in bad faith, both of which are alleged to have been committed by QPR.  

The worrying feeling behind 3rd party dealings is that players are seen as commodities, and individual or agent companies may act as a speculator by purchasing a percentage in a player from the Club in the hope that their value will go up. This is a situation which is simply not in the player’s best interests or in the interests of the game as the transfer fee does not go to the Club.

Following the West Ham and Tevez affair, The FA has imposed strict rules to regulate the involvement of third parties in transfers, thus hoping to create openness and clarity in transfer dealings.

Under the newly created Third Party Investment in Players Regulations, The FA has now raised allegations against QPR with specific reference to parts A1 and A2, being that, before registering a player for a Club, the FA must “be satisfied that there exists no agreement between the Club, player and a third party”. The FA is understood to allege Faurlin’s owner was a company and that QPR had submitted false information in documents lodged with the FA when Faurlin signed an extension to his contract in October 2010, much like the situation with West Ham in 2007.

No Club has yet been charged under the new rules, so the FA commission hearing the QPR case will be under pressure to set a convincing precedent if it upholds the charges. They will be keen to have the case decided soon, so that any penalty will come into effect this season to avoid a repeat of Sheffield United’s much benighted fall from grace after the Tevez affair. By way of comparison, in June 2008 Luton Town were docked 10 points by the FA for breaches of rules which included the dealing with unlicensed agents, none of which was as substantial as Faurlin’s.

These rules, introduced in June 2009, importantly do not act retrospectively, and as such existing third party player ownership which does not fall foul foot he previous regulations will be allowed until that player is transferred.

QPR issued a statement on Wednesday saying the Club will be “denying all of the charges and requesting a formal FA hearing to determine them. QPR are confident that there has been no deliberate wrongdoing involved”.

FrontRow Legal will provide further developments on this case as it progresses……………

This entry was posted in Players, Coaches & Managers, Regulatory & Disciplinary, Sports Business. Bookmark the permalink.

Leave a Reply

Our tweets

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Contact Our Team

Our dedicated Office Support Team are always on hand to assist clients with any general aspects relating to FrontRow.

Tel: 0113 426 0001

Fax: 0113 298 7400

Email: info@frontrowlegal.com