Third Party Ownership (TPO) is an agreement between a club and a
third party (businesses and/or individuals–investment funds,
agents etc.) to exchange a percentage of the so-called
"economic rights" of the future transfer (value) of a
football player. TPO is currently banned in England, France and
Poland. It is a practice known to be widely used in South America,
Spain, Portugal and parts of Eastern Europe.
This investment type can be deemed legal due to the principle of
freedom of contract. However, FIFA intends to ban TPO due to
Article 18bis par. 1 of the FIFA Regulations on the Status and
Transfer of Players which states; "No club shall enter into a
contract which enables any other party to that contract or any
third party to acquire the ability to influence in employment and
transfer-related matters its independence, its policies or the
performance of its teams". This rule seems to ban all kind of
TPO agreements, but it actually forbids them only if there is an
element of influence. Therefore, FIFA does not actually have a
binding rule against the investors. "We took a firm
decision that TPO should be banned but it cannot be banned
immediately. There will be a transitional period" said
Sepp Blatter, the chairman of FIFA, demonstrating the legal gap to
ban TPO agreements. Indeed, the grounds to ban TPO agreements
should be examined. Why is FIFA keen on forbidding this investment
system in the absence of a binding regulation? The example of
England Premier League shows us the motive under FIFA's
inclination: The original prohibition regulations in the Premier
League came as a result of the Carlos Tevez issue, where a third
party owner had the contractual right to force West Ham United to
sell the player if a suitable bid was received. This was against
the current regulations at the time. Subsequently, the Premier
League tightened its regulations to prohibit any type of TPO. So
that, it may be stated that FIFA is against TPO because third
parties generate power to interfere with the contractual rights of
the parties. Without a transfer and thereby the termination of the
contract, there is no financial incentive. On the other hand, some
benefits should not be denied, such as small clubs surviving in the
football market by purchasing "big" players that normally
cannot be afforded by the club. Similarly, investors are capable of
promoting the career of the player more effectively when compared
to the club. TPO could seem as a different type of investment but
it is not substantially different from a loan agreement.
Beyond the abovementioned advantages and disadvantages, the
other justification to ban this kind of agreements, which is the
most critical part, is the risk of influencing the result of the
games. For example, an investor could own more than one player on
each side of a game, which could arguably affect the game in a
negatively. So that; this potential should be enough to ban third
party agreements under current general regulations in all Europe.
In respect of Turkish legislation, it is known that the immoral
agreements are not valid under Turkish Code of Obligations. A
question mark hangs over third party ownership agreements; is the
risk of influencing the game results enough to deem these
agreements invalid? As it seems, FIFA is conscious of
abovementioned risks and intends to ban it completely.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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