Wednesday, September 26, 2007

Controlling Clubs & Players: Your View Depends On Your Continent

International football confederations, clubs, leagues, player agents and lawyers from around the world descended on London’s Selfridge Hotel yesterday, for The Global Game: Ownership of Football Clubs & Players, a briefing organised by World Sports Law Report and Clintons, entertainment, sport and media lawyers.

The event was organised to examine if new investment into football is centred on profiting from the game at the expense of supporters, with wins on the pitch less important than the balance sheet and if so, what should be done about it. There has been concern, in English football in particular, that new investors in the game are taking this approach due to the amount of money newly available in football.

Arsenal’s financial results, released the day before the event, added gravitas, as did comments by Arsenal Chairman Peter Hill-Wood, reported by the Daily Telegraph: ‘I would like to think it's a stable business, run by civilised people who understand the values of the club. We are custodians of Arsenal FC’. Alisher Usmanov, a Russian Businessman, is building a stake in Arsenal through his investment vehicle, Red & White holdings. His Wikipedia entry suggests that he has spent time in jail.

It appears, however, that your perspective on investment in the game depends on where you are sitting. “Where opportunities exist, you will find opportunists”, said Nick Craig, the Football League’s solicitor, pointing out that the FA had stopped profits from football being reinvested in the game when it wiped away its rules preventing club directors from receiving salaries or on paying themselves dividends.

This view was supported by Neil Doncaster, Chief Executive of Norwich City, who agreed that “something must be done” to protect the game from unscrupulous investors, perhaps at government level.

However, the viewpoint from Latin America, represented by Miguel Remmer, Estudio Beccar Varela, Argentina; Jose Carlos Meirelles, Pinheiro Neto Advogados, Brazil; and Agustin Mayer, Ferrere Abogados, Uruguay, was that any investment in football is a good thing. On the subject of debt being used to finance football club purchases, it was mentioned that this is normal practice in business, and why should sport be any different? Michael Murphy, of Garlicke & Bousfield of South Africa, agreed with the Latin American view.

The Latin Americans also pointed out that ‘third party ownership’ of players is an incorrect statement about what occurs in Latin American transfers. The owner of player’s registration is the club, which sells the player to another club, however the economic rights to that player are passed over to a third party.

Hitesh Jain, a Partner with ALMT Legal in Mumbai, was concerned with protecting players from possible exploitation by agents. Hitesh made the point that many Indian sports stars come from a poor background and have no experience of managing contracts or wealth.

What became clear over the course of the day was that issues over unsuitable investors in both clubs and players are likely to continue because of the way the football market is now operating as a global game, as pointed out by the Annual Review of the European Football Players’ Labour Market.

Football needs investment, and as our Latin American and African speakers pointed out, it will accept this investment from wherever it can get it. Football is increasingly looking overseas for players, as it is often cheaper to buy a player from a far-flung corner of the globe than to develop a player through the youth system. Player agents and representatives facilitate the movement of players internationally – like it or not. The transfer market is split into two ‘windows’, which can result in clubs taking a gamble on a player they do not know much about if the end of the transfer ‘window’ is drawing near, elevating the player’s and agent’s power over the club.

Agents must navigate their way through a maze of rules and regulations imposed on them by international football confederations, national associations and leagues. It became clear from discussing these differing regulations that perhaps the reason that agents so often attract suspicion is because these regulations are so difficult to decipher. The only people that truly understand these rules are the people that deal with them on a daily basis – the agents themselves. I suggest that the global regulation of agents by FIFA could help to clarify things and remove the stigma that is attached to the word ‘agent’ in football.

Finally, a few statistics from yesterday’s event;
• UEFA’s Club Licensing System is now in place in all 53 member associations;
• Only 19 of the 20 Premier League clubs applied for a UEFA Club Licence, essential for European competition, last season (I did not ask which club had not applied);
• 29.8 million people watched Football League games last season, a 15% increase on the previous season;
• The Football Association of Ireland is to introduce a Salary Cost Protocol system for its Premier Division during the 2008 season.

Presentation packs from the event are available from the event. Please contact Jit Jaswal for more details.

 Andy Brown


k+webb said...

I wonder who invests in the south american leagues? There's no law on who can invest in your club or is there? You can put money down on a house and get investigated by the Inland Revenue yet you can buy up Arsenal or Chelsea shares for millions and who cares? You can buy a house and borrow money if the value holds up so unscrupulous business persons will do the same in a larger way with football clubs. It's just a gravy train at the minute. This can only be done if the business at the club is not dealt with properly in the first instance. It's a shame that there is not one rule governing football in all matters - like FIFA.


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