Cast your minds back, if you will, to the summer of 2006. Fresh off the back of the 2006 FIFA World Cup in Germany two members of the Argentina squad that were knocked out in the quarter-finals by Germany were being pursued by Europe’s elite clubs.
The duo in question was Corinthians’ Javier Mascherano and Carlos Tevez, formerly of River Plate and Boca Juniors respectively. Mascherano, a dogged central midfielder, was a mainstay in the national team, anchoring the midfield allowing Juan Román Riquelme to showcase his full array of languid skills.
Tevez, El Apache, was revered in Argentina and Brazil for his mix of enthusiasm and technique but wasn’t an automatic choice for La Albiceleste due to the presence of Lionel Messi, Javier Saviola and Hernán Crespo.
However the 22-year-olds were undoubtedly two of the biggest talents in world football with Barcelona, Real Madrid, Manchester United, Arsenal, Bayern Munich and AC Milan just a small sample of the clubs fighting it out for their signature.
And yet, on the August 31, Tevez and Mascherano found themselves either side of Alan Pardew, holding aloft West Ham United kits with a look of bemusement etched on all three faces. Two genuinely world-class footballers has spurned the advances of a pick of Europe’s premiere clubs to sign for West Ham, who had finished 9th in the previous Premier League campaign and runners up to Liverpool in the FA Cup final.
Tevez would now be partnering Carlton Cole and Marlon Harewood, while Mascherano would be scrapping in midfield alongside Hayden Mullins, Nigel Quashie and Nigel Reo-Coker.
To understand how two Argentine internationals had ended up at the Boleyn Ground as opposed to the Camp Nou, a third party has to be added to the story, quite literally, in the shape of Iranian businessman Kiavash Joorabchian. Joorabchian was the founder of Media Sports Investment who, according to the company’s now defunct website, were “a London based international investment fund”.
In 2004 MSI purchased a controlling 51% stake in Brazilian club Corinthians across ten years, leading to an influx of players such as ex-Porto midfielder Carlos Alberto, Nilmar, Tevez and Mascherano.
MSI invested funds into the club to cover debts accrued by Timão while also purchasing direct stakes in players allowing them to retain financial interest in the likes of Tevez’s career paths.
While the initial buzz surrounding Mascherano and Tevez’s arrivals in the Premier League was one of excitement, the confusion surrounding the exact details of the transfers remained an elephant in the room. In November 2005 MSI pulled out of a potential takeover deal of West Ham citing a failure to agree a price with the club’s directors. However a day after the Hammers announced the signings discussions around a takeover re-started, albeit unsuccessfully.
The confusion surrounding the deals only grew as the season progressed, especially when Mascherano, who had struggled to keep his place in West Ham’s first-team, sought a move to Liverpool in January.
Although Mascherano’s protracted move was eventually ratified by the Premier League, West Ham were nonetheless handed a record £5.5 million fine in April 2007 after being found guilty of acting improperly and withholding vital documentation over the pair’s ownership.
West Ham pled guilty and, by doing so, avoided a points deduction that would, in all likelihood, have seen the club relegated. As it happened Tevez scored the winning goal on the final day of the season against Manchester United as the Hammers finished three points clear of Sheffield United, who occupied the final relegation spot.
In the aftermath of the fine, details of the murky transfer became clearer, although the exact mechanics were still not completely evident. Mascherano was tied to Global Soccer Agencies and Mystere Services, two similar companies to Joorabchian’s MSI, to which Tevez was tied.
The contracts signed by the players differed slightly, although the balance of power wasn’t with West Ham, Mascherano or Tevez. In the event of West Ham seeking to offload Mascherano, a deal could only take place “in the event of permanent incapacity or incapacity of 18 months over a 20-month period”, as the disciplinary panel heard.
Tevez’s contract stipulated that only the company had the power to exercise a transfer or move away from West Ham, leaving both the player and club powerless to reject a transfer.
In light of West Ham’s transfer saga third-party ownership of footballers was banned by the Premier League from the start of the 2008-09 season. In April UEFA and FIFPro, the world players’ union, asked the European Commission to outlaw Third Party Ownership (TPO) completely. This move was made after clubs across Europe complained against FIFA’s decision to ban TPO of players in September 2014.
Under the proposed ban, existing TPO player contracts can continue up to the point they expire, but cannot be extended. New TPO deals can be entered into until the end of April but they cannot be for longer than a year.
As it stands English teams are still able to deal with companies involved in TPO, however they are required to purchase the player in full, often inflating transfer fees, as companies looks to maximise the return on their investment.
This was evident in the difficulty Tevez had in moving to Manchester United in 2007, with the Hammers and MSI struggling to compromise on a deal before West Ham earned just £2 million off the move.
Supporters of TPO are still vocal, despite the obvious ethical issues with a company effectively ‘owning’ a footballer and dictating his career with the sole intention of maximising profit.
The main argument in support of TPO is that it allows smaller teams to purchase players they would otherwise not be able to sign, as was the case with West Ham. The price of transferring players in today’s market is so bloated that, for some teams, the use of TPO is simply the only way to compete in top leagues. Despite FIFA and UEFA seemingly being on the same page in wanting to faze TPO out of football completely, doing so would be a logistical nightmare, leading to scepticism around whether it is possible to do so.
While the Premier League, Football League, Football Association and the Polish and French Leagues have regulations in place against TPO, the rest of the world does not and therefore TPO is still prevalent, especially in Spain, Portugal and South America.
FC Porto is a prime example of how TPO allowed the club to thrive both domestically and in European competitions. The Dragões have a fantastic scouting network combined with the ability to share the financial burden of transferring players to the club.
Porto has developed a mutually beneficial relationship with both super-agents – for example Jorge Mendes – and TPO. The Dragões get a continual flow of the best South American talent that, in turn, is sold on for vast profit. Falcao, James Rodríguez, Eliaquim Mangala, Nicolás Otamendi and João Moutinho are just some of the players that have raked in over €600 million worth of transfer fees, although it remains unclear how much of that money is retained by Porto.
In the Brazilian top flight 90% of players’ economic rights are partly owned by a third-party, while KPMG reported that TPO accounts for over 1,000 professional footballers across Europe.
World football has reached an uncomfortable crossroad. TPO is so engrained in footballing society that it appears almost impossible to reel it back in, at least not on a widespread scale. Furthermore the murkiness with which super-agents such as Mendes and Pini Zahavi cross over with TPO is increasingly unclear. Guardian reporter David Conn claimed Mendes was “serially involved in the third-party ownership of players” despite FIFA regulations.
Mendes is therefore acting as both agent and third-party, a clear conflict of interest in spite of FIFA’s agent regulations that state: “Player’s agents shall avoid all conflicts of interest in the course of their activity.”
Mendes has helped both Monaco and Valencia’s projects under new owners Dmitry Rybolovlev and Peter Lim respectively, using his pool of talent to help influence and direct transfers.
TPO might not be an issue in the English game anymore, however it remains the biggest issue of integrity in world football, which is saying a lot given the way FIFA has been dragged through the mud in the media recently.
On the one hand it allows clubs to improve the quality of their squad beyond their financial means but, on the other hand, it promotes a loss of freedom in footballers and their trade.
While everyone is a winner in a transfer like James’ to Real Madrid, where the player, club and agent all receive handsome fees, lower down on the food-chain TPO could be seen to promote “modern-day slavery” in the words of UEFA president Michel Platini.
The awkward question remains: with so much invested by both third-parties and clubs, how on earth do FIFA plan to remove such vast amounts money from the game without crippling it?
The idea that businesses and companies would allow an investment to run down and expire without any financial return and for the good of the game may work in ‘FIFA world’ but, in reality, it is simply not viable.
By James Robinson. Follow @JamesRobJourno