Oscar transfer fee shared around in Brazil
Reuters - Friday 27 July 2012, 20:32
The transfer fee Chelsea paid
for Brazilian Oscar will not all go to his former club
Internacional, an example of how the controversial practice of
third-party ownership has taken hold in Brazil.
The fee, which media have estimated at £25 million, will instead be divided up between two
Brazilian teams, the midfielder himself and the entrepreneurs
who own what are called his "economic rights".
The London side completed Oscar's signing on Wednesday and
the 20-year-old playmaker is expected to join Frank Lampard,
John Terry, Fernando Torres and the rest of his new team mates
when his Olympic duties with Brazil end next month.
The transfer fee is one of the highest ever paid to a
Brazilian club following the more than 21 million pounds Sao
Paulo received from Real Betis for Denilson in 1998.
It involves financial payments that are commonplace in
Brazil but unusual in Europe, where transfer fees normally go
directly from one club to another.
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. A small part of Inter's fee will go to Oscar's first club
Sao Paulo under a separate sell-on clause.
PLAYER DEALING
Third-party ownership gathered strength in the middle of the
last decade when impoverished Brazilian clubs realised they
could hold on to an important player as well as secure a quick
cash injection by selling a percentage of his contract.
Investors, including executives at two big supermarket
chains, formed companies to buy and sell players knowing that
one big sale could guarantee a significant return.
The only potential problem were regulations that only
allowed clubs to buy and sell players.
World football governing body FIFA banned third-party
ownership in 2008 after English football was hit by the
controversial arrival of Carlos Tevez and Javier Mascherano, the
two Argentine players who left Brazilian club Corinthians to
sign for West Ham.
It was revealed that West Ham did not own the players'
contracts and after investigations and court cases the London
club was fined £5.5 million.
Brazilian investors get around the rule by signing players
for small, sometimes specially created clubs, and then handing
them over to bigger sides.
They claim such deals are no different from loan deals in
Europe, where a big club buys a young player and immediately
farms him out to a smaller club to give him experience.
THIRD PARTIES
"Chelsea has bought several players who have never played
for Chelsea," said Federico Pena, director of football at
Traffic, a sports marketing company that is one of the leading
investors in Brazilian players.
FIFA said it relaxed rules in 2010 so they do "not prohibit
pure investment tools as such."
In an email response to questions, FIFA said that investment
of a third party is now only illegitimate if and when the "third
party has the right to influence the club's choices in
employment and transfer-related matters."
Officials at Internacional said they did not want Oscar to
leave. However, they also acknowledge a club alone rarely
decides when a player will be sold.
Football teams worldwide find it tough to hold on to a
player who wants a transfer. But in Brazil outside parties who
own all or part of a player's economic rights can clearly
influence that decision if an attractive offer is on the table.
Whatever the case, Pena said the practice has spread and
that it is now common in Argentina and even in Portugal.
It has become less popular in Brazil recent years as
cash-strapped European clubs suffer from economic woes and
Brazilian teams expand their revenue streams as the country's
economy grows and more people join the consuming classes.