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FIFA Bans Third Party Ownership

Fri 26th Sep 2014 | FIFA

FIFA’s Executive Committee have voted to ban Third-Party Ownership of players.

The ban was announced by FIFA President Sepp Blatter and football’s governing body will now set up a working group to implement the ban.

Widespread in Brazil and Argentina but is also present in some European countries such as Portugal, third-party ownership is seen by many as a practice which drains huge sums of money from the game.

Following the news, Thomas Barnard, solicitor at Thomas Eggar LLP said, FIFA’s announcement that third party ownership of players is to be banned is likely to be welcomed in some camps, with others seeing it as yet another infringement on a club’s right to manage its financial affairs as it decides appropriate.

“Third party ownership (“TPO”), the process by which a club shares the “ownership” of a player with third-party investors, is already outlawed in the Premier League.  However, it remains a popular mechanism for teams in Europe and other parts of the world, allowing clubs to attract top talent without having to fund the player’s full transfer price. It offers investors the opportunity to profit from their stake if the player sees an increase in their transfer value.

“The fact that TPO is banned in some leagues whilst permitted in others has long been criticised.  Where permitted, it clearly provides a financial advantage which is likely to be reflected in on-field performances.  This distorts the ability of teams to compete on a like for like basis in international competitions and leagues, where teams from different leagues around the world are subject to different rules.

“It’s expected that the majority of Premier League clubs will welcome the decision, removing the possibility or perception that certain clubs from other nations have an unfair economic advantage.  UEFA too will likely welcome the decision, having pressured FIFA to make such a change for some time.

“Given the impact on clubs that utilise TPO, it’s expected that FIFA will phase in new rules over time.”

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