Sometimes the player takes a cut, and his agent will get a bit of that.
In Brazil, it’s a totally different story, as I describe in this Reuters piece on Oscar’s 25 million pound transfer from Internacional to Chelsea.
In this and many other cases:
“The fee…will instead be divided up between two Brazilian teams, the midfielder himself and the entrepreneurs who own what are called his “economic rights.”
In Brazil and some other South American nations, players have two parallel deals, one for their playing rights and another for their economic rights.
The first stipulates which team the player plays for, the second who gets what if the player is transferred.
In addition to their clubs, companies, investment funds, the players and their agents can all hold a stake in a player’s economic rights.
In doing so, they are investing in the player — usually when he is young — in the hope of making a profit if he is eventually sold for a big transfer fee.
“The easiest way to understand it is to think of football as you do the stock market, where the players are stocks,” said Fabio Buratta, a businessman who has shares in Brazilian players.
“If I think that a young player is promising, I pay the club, say, 50 percent of what they think he is worth and in the future I will get 50 percent of whatever fee he commands. The risk is that the player doesn’t make it and I lose my money.”
In Oscar’s case, 25 percent of his economic rights were held by himself and 25 percent by his agent, according to Internacional. The other 50 percent belonged to the club.
That means half of Chelsea’s transfer fee will go to Internacional, with the rest divided between the player and his agent.
That, though, is the thin end of the wedge. Some companies were created especially to sign young players in the hope of selling them for a big fee.
It’s questionable ethically, and not just because human beings are traded like commodities. What happens if a company wants to sell a player when a big offer comes in and the club doesn’t want to sell? What happens when a company wants to sell to a rival team? Or if the company has players on different teams?
FIFA have rules that govern third party ownership and they were tightened after the scandal surrounding Carlos Tevez and Javier Mascherano’s move from Corinthians to West Ham. But they’re still open to abuse. So much so that the English FA went even further than FIFA to try and restrict the practice.
It still happens and it may even be a necessary evil for Brazilian clubs who need all the investment they can get.
But I am sure we’ll hear more about such deals in the future.