Three investment funds say the French soccer league has given them permission to give financing to teams in exchange for sharing a player’s transfer fee. A number of Irish registered entities are used for the ownership of premiership and European league players.
The model is a variation on so-called third-party ownership, which the sport’s European ruling body UEFA, and several other sports bodies, objects to because of ethical concerns.
Executives at Manchester-based R2 Asset Management Ltd, Malta-based Doyen Sports Investments Ltd and Fairplay Capital Sicav SA in Luxembourg said they have the league’s consent to broker deals under which they can receive part of a player’s future transfer fee on top of interest. French league spokesman Charles-Herve Petit declined to comment on any communications it has had with the funds.
A report by KPMG’s Spanish unit last year said the French, English and Polish leagues were the only European championships to ban third-party ownership.
The funds are seeking to make a profit from the $4bn European transfer market that has increased sevenfold in value since 1995, as clubs such as Manchester City and Paris-Saint Germain have racked up huge losses in the pursuit of success on the pitch.
“The transfer market figures are terrific,” said Laurent Pichonnier, a partner of Luxembourg-based Fairplay Capital. The company is seeking to raise as much as €150m to invest, according to Pichonnier. “If you get one-third of the transfer, your return is booming,” he said.
Using footballers as assets raises “ethical and moral” questions, UEFA general secretary Gianni Infantino said in a column last year. He added that clubs could come under pressure from investors to move players on and said that teams should rely only on their own funds to acquire players.
Of the 20 French first division clubs, only Paris-Saint Germain and Monaco were not interested in doing business with Fairplay, Pichonnier said, adding the fund aims to operate in Italy, Germany and Belgium.
Clubs are open to alternative funding sources as banks are wary of lending to them because of teams’ poor financial performance, Pichonnier said.
Fairplay, which they say would have no influence on the management of clubs, “is on the same page” as the French league’s financial regulator, which is known by its acronym DNCG, Pichonnier said.
Doyen Sports, which has done more than €100m of such deals with clubs including defending Spanish champions Atletico Madrid, is working on its first with a French club ahead of the January transfer window, according to chief executive Officer Nelio Lucas.
R2 Asset Management, which has invested over €63m across Europe, has used the same model for some time in France, the fund’s CEO Ray Ranson said.
The French league “realises it’s a financial transaction and there is no ownership of anything,” Ranson said. “There is no influence on clubs.”
The English Premier League banned third-party financing in 2008 after it emerged West Ham ceded total control of striker Carlos Tevez to investors.
The league has yet to rule on a request by Doyen Sports to approve the model that it intends to use in France, Lucas said.
In a May 2013 interview, Premier League CEO Richard Scudamore
compared investors owning stakes in player transfer rights to “indentured slavery”.
Lisbon-based Sporting said last month that Doyen CEO Lucas had exerted “illegitimate pressure” on the club to sell Marcos Rojo after acquiring a 75pc stake in the Argentine defender’s economic rights and met other teams with a view to him being sold.
Sporting’s club president Bruno de Carvalho has claimed that Doyen offered the player for sale over the club’s head, “to Manchester United and all the world”.
Sporting rescinded the arrangement and five days later agreed to trade him to Manchester United for €20m.
The club has repaid the €4m which Doyen originally loaned the club but are refusing to pay a further €11m, which would equate to 75pc of the transfer fee.
Lucas said the accusations were not true and Doyen is now suing Sporting for breaking the contract.