Third Party Player Ownership of Footballers

Registration of Football Players in the UK

For a football player to play for a professional football team in either England or Scotland his registration must be owned by that club, therefore meaning that the club has the ownership right over that players services.

Player registrations can be bought and sold and also loaned between clubs.

In recent years, however, there has been a growing trend of footballers who are subject to third party player ownership.

Third Party Player Ownership

What is meant by Third Party Player Ownership?

Third party player ownership is the term which is used to describe the situation whereby a football player is registered to pay for a football club but that club does not own the player and is not entitled to 100% of the future transfer value of the player.

How does third party player ownership come about?

The basic notion behind third party player ownership is that a company or an individual will give a club or player money in return for owning a percentage of a players transfer fee or the economic right accruing from that player.

There are a number of ways in which this will come about, which are as follows:

  • Speculation

  • Financial Support

  • Global Football Fund

Speculation

In this respect a company or an individual will act as a speculator and will purchase a percentage in a player from a club, often when the player is young, in the hope that their value will go up.

Financial Support

In this respect a company or an individual will provide financial support for a young player’s development in return for an agreement that when the player signs a professional contract with that club the company or individual will be entitled to a percentage of any future transfer fees. 

Global Fund

In this respect the global fund will take a percentage of any transfer fees from a number of players who play for the same team rather than simply an individual player.

Why would a football club agree to third party player ownership of its players?

Third party player ownership is a system which is especially common in South America. Two of the most famous footballing countries – Brazil and Argentina – hail from this continent and as a consequence some of the world’s best football players come from these countries.

There is a huge market for selling South American players to Europe and the clubs in South America often make huge amounts of money doing this. Comparatively the clubs in South America do not have as much money as the clubs in Europe so they have had to develop a system whereby they can sell young talent to European clubs for high value.

Consequently there is huge money to be made which is why many companies and individuals have tried to invest into this market. It is also attractive for the South American clubs as often the companies and individuals have experience of conducting such deals and can get large sums of money for the clubs than they otherwise would have been able to.

Also accepting money for a percentage of a young player may also provide an immediate solution for a club plying its trade in a league where there is no the same money as those in Europe.

What is the position in England in relation to third party player ownership?

Third party player ownership was relatively non-existent in English football until only a couple of seasons ago when two Argentine players were transferred to a club which would not usually have been able to attract such high class stars.

Both of the players were still owned by a third party, a company run by a football agent, meaning that if the players were sold on by the club then that company would get a large percentage of the transfer fee. The players were brought to the small club as a means of introducing the third party ownership and then making huge sums of money when the players were sold on to bigger clubs – which they both were.

Was this illegal under the Football Association rules?

At the time third party player ownership was not banned outright as the Premier League rules only forbid clubs from entering into contracts with a third party which would allow that third party to materially influence the clubs policies or the performance of its teams.

This did not, however, outlaw all third party player ownership. In the above case, however, this rule was broken as the contract with the third party owners gave them the exclusive right to negotiate any transfer involving that player.

What do the current rules say?

Following the saga involving the two Argentinean players both the Football Association and the FA Premier League introduced rules through the Premier League rules and the FA Third Party Player Ownership Regulations outlawing any form of third party player ownership in English football.

The rules require that a player’s registration and economic rights are not retained by any third party when a player is transferred and registered with a new club. The new club must be the sole owner of the rights.

These regulations do not apply retrospectively, however, meaning that any existing third party player ownership which does not fall foul of the previous rules will be allowed until that player is transferred.

What is the position in world football?

Following the issues with the case in English football, the International Governing Body of Football – FIFA – has changed its rules in relation to third party player ownership.

  • The FIFA rules are not as restrictive as the FA and Premier League rules, however, proving the following:

  • That no club shall enter into a contract which enables any other party to acquire the ability to influence in employment and transfer related matters its independence, its policies or the performance of its teams.

  • The FIFA rules are similar to the earlier FA rules meaning that players can still be owned by third parties in other countries but this will have to be relinquished if they are transferred to play in England.