The Editors of the International Sports Law Journal (ISLJ) invite you to submit abstracts for the next edition of the ISLJ Conference on International Sports Law, which will take place on 24 and 25 October 2024 at the Asser Institute in The Hague. The ISLJ, published by Springer and TMC Asser Press, is the leading academic publication in the field of international sports law and the conference is a unique occasion to discuss the main legal issues affecting international sports and its governance with renowned academic experts.

We welcome abstracts from academics and practitioners on all issues related to international and transnational sports law and their impact on the governance of sport. We also welcome panel proposals (including a minimum of three presenters) on specific issues of interest to the Journal and its readers. For this year’s edition, we specifically invite submissions on the following themes and subthemes:

Reformism in transnational sports governance: Drivers and impacts

• Legal and social drivers of reforms in transnational sports governance   
• The role of strategic litigation (before the EU/ECtHR/National courts) as a driver of reform;
• The role of public/fan pressure groups on clubs, competition organisers and governments as a driver of change.
• The impact of internal reforms in transnational sports governance: Cosmetic or real change? (e.g. IOC Agenda 2020+5, FIFA governance reforms, CAS post-Pechstein changes, WADA sfter the Russian doping scandal)
• Emerging alternatives to private sports governance – the UK’s Independent Football Regulator.

The organization and regulation of mega sporting events: Current and future challenges 

• Mega-sporting events as legalized sites of digital surveillance 
• Greening mega-sporting events (e.g. carbon neutral pledges, environmental footprints of events, the impact of multiple hosting sites)
• Mega-sporting events and the protection of human rights and labour rights (e.g. Paris 2024 Social Charter, Euro 2024 human rights commitments)
• The Olympic Games and athletes’ economic rights (remuneration/advertisement)
• Reviews of the legal issues raised at Euro 2024 in Germany and the Paris 2024 Olympic Games
• Previews of the legal issues likely to have an impact on the FIFA 2026 World Cup and the Milano-Cortina 2026 Winter Olympic Games

Please send your abstract of 300 words and CV no later than 15 July 2024 to a.duval@asser.nl. Selected speakers will be informed by 30 July.

The selected participants will be expected to submit a draft of their paper by 1 October 2024. Papers accepted and presented at the conference are eligible for publication in a special issue of the ISLJ, subject to peer-review. 

The Asser Institute will provide a limited number of travel & accommodation grants (max. 300€). If you wish to be considered for a grant, please explain why in your submission.

Editor's note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines 

2024 and 2028 Olympic Games to be held in Paris and Los Angeles respectively

On 13 September 2017, the Session of the International Olympic Committee (IOC) held in Lima, Peru, elected Paris and Los Angeles as host cities of the 2024 and 2028 Olympic Games respectively. On this occasion, the IOC President Thomas Bach said that ''this historic double allocation is a 'win-win-win' situation for the city of Paris, the city of Los Angeles and the IOC''. The idea of a tripartite agreement whereby two editions of the Olympic Games would be awarded at the same time was presented by a working group of the IOC Vice-Presidents established in March 2017. Both Paris and Los Angeles have pledged to make the Olympic Games cost-efficient, in particular through the use of a record-breaking number of existing and temporary facilities. In addition to economic aspects, it will be worthwhile to keep an eye on how both cities will address human rights and other similar concerns that may arise in the run-up to the Olympic Games. 

FIFA President accused of interfering with the work of the FIFA Governance Committee

On 13 September 2017, Miguel Maduro, a former Chair of the FIFA Governance Committee who was summarily dismissed in May 2017, appeared in the UK House of Commons to give testimony on the undue influence that FIFA's President Gianni Infantino allegedly exerted over the work of the Governance Committee. Most importantly, Maduro claimed that Infantino attempted to interfere with the Governance Committee's decision to bar Vitaly Mutko, a Deputy Prime Minister of Russia, from sitting on the FIFA Council. The former Chair of the Governance Committee commented that Infantino ''chose to politically survive'' and carried on to assert that FIFA has a ''deeply embedded structure that is extremely resistant to independent scrutiny, transparency and accountability''. FIFA denied Maduro's accusations, stating that ''exchanges between the administration and FIFA's committees […] are logical and even desirable, so for these exchanges to be portrayed as undue influence is factually incorrect''.

The CAS award in Jersey Football Association v. UEFA

In its press release of 28 September 2017, the CAS communicated that it had delivered an award in the dispute between the Jersey Football Association (JFA) and UEFA which emerged from the JFA's application for UEFA membership submitted in December 2015. The CAS set aside the decision rendered by the UEFA Executive Committee on 1 September 2016 in which the JFA's application for UEFA membership was rejected, and ordered that the respective application be forwarded to the UEFA Congress for consideration. In view of the CAS, it is the UEFA Congress and not the UEFA Executive Committee that is competent to consider membership applications. It should be stressed, however, that the CAS dismissed the JFA's request to ''take all necessary measures to admit the JFA as a full member of UEFA without delay'', noting that the UEFA Congress has discretionary powers to admit new members. In this regard, the CAS further held that, on the basis of the evidence provided, it appeared that the JFA did not satisfy the requirements for UEFA membership laid down in Article 5(1) of the UEFA Statutes.

Official Documents and Press Releases

• CAS – The CAS rules on the case Jersey Football Association v. UEFA
• Human Rights Now – Letters demanding that Olympic authorities end rainforest destruction and human rights abuses connected to Tokyo 2020 Olympics construction
• Human Rights Watch – Qatar: Take urgent action to protect construction workers
• IOC – Declaration of the IOC Executive Board in Lima
• IOC – IOC Athletes' Commission Strategy
• IOC – IOC makes historic decision by simultaneously awarding Olympic Games 2024 to Paris and 2028 to Los Angeles
• IOC – Report of the IOC 2028 Evaluation Commission
• UEFA – 13^th Extraordinary UEFA Congress decisions
• UEFA – Keeping competitive balance – Aleksander Čeferin
• UEFA – Nations League regulations approved
• UEFA – UEFA President reflects on a rewarding year of progress
• WADA – 2018 List of Prohibited Substances and Methods
• WADA – 2018 Summary of major modifications and explanatory notes
• WADA – Proposed International Standard for Code Compliance by Signatories – Version 2.0
• WADA – Tanzania ratifies UNESCO Anti-Doping Convention
• WADA – WADA launches Phase II of stakeholder consultation on Compliance Standard
• WADA – WADA provisionally suspends accreditation of Paris Laboratory

In the news

Doping

• Associated Press Russian doping whistleblower faces arrest if he returns
• Sean Ingle Anti-doping agencies call on IOC to ban Russia from 2018 Winter Olympics
• Tariq Panja IOC investigation of Russian doping might soon yield penalties
• RT News McLaren denies he 'dropped charges' of state involvement in doping in Russia
• Swimming World Court of Arbitration for Sport reduces sanctions on Canadian swimmer William Brothers

Football

• Ed Aarons FIFA and UEFA accused of being 'enablers' of tax evasion in football by MEPs
• CIES Football Observatory Balance sheets for transfer operations: From Monaco to Paris St-Germain
• David Conn FIFA's Infantino accused of interfering with governance committee decisions
• David Conn FIFA President Gianni Infantino accused of bad governance by former committee member
• Paul Ferguson Irish FA to ask FIFA for money back after poppy u-turn
• FIFPro Danish women's World Cup conflict explained
• Rob Harris Spanish league wants UEFA to investigate Man City's spending
• Steve Menary Tebas calls for European Union probe into Neymar transfer
• Tariq Panja FIFA President Gianni Infantino faces new ethics complaint
• Tariq Panja Former FIFA official's testimony could raise new ethics questions
• John Percy Leicester City submit appeal to FIFA in bid to complete £25 million Adrien Silva signing
• Ben Rumsby Chelsea face second FIFA investigation in eight years over youth transfer policy
  

Other

• BBC News Sergey Bubka: Athletics Integrity Unit looking into payment to ex-IAAF treasurer
• Tim Daniels Prosecutors allege Brazil's Olympic Committee conspired to buy IOC votes
• Marina Hyde IOC selective blindness continues but Rio 2016 scandal looks all too familiar
• Liam Morgan IOC admit votes may have been bought by Diack in Olympic Games bidding process
• Sebastian Smith Brazil police say Rio Olympics were bought in corrupt scheme

Academic Materials

• Antoine Duval and Oskar van Maren The Labour Status of Professional Football Players in the European Union: Unity in/and/or Diversity?

Blog

Asser International Sports Law Blog

• Christopher Flanagan The Evolution of UEFA's Financial Fair Play Rules – Part 1: Background and EU Law
• Christopher Flanagan The Evolution of UEFA's Financial Fair Play Rules – Part 2: The Legal Challenges
• Tomáš Grell FIFA's Human Rights Agenda: Is the Game Beautiful Again?

Law in Sport

• Jack Anderson and Neil Partington Duty of care in sport: The case for a sports ombudsman in the UK
• Hazar El-Chamaa The lifecycle of an international athlete: Part 2 – Key immigration issues when entering the UK
• Laura Dadswell The lifecycle of an international athlete: Part 3 – Key UK income tax points for non-residents
• Tim Meakin, Tim Walker and Richard Davies Confidential data leaks: What are the vicarious liability risks for sports organizations?
• John Mehrzad Who has jurisdiction over international football transfer disputes?
• Michael Savva An update on Financial Fair Play – Case study: The Neymar transfer
• Gavin Stenton The lifecycle of an international athlete: Part 4 – Dealing with branding and image rights

Others

• James M. Dorsey Tackling the elephant in the room: The incestuous and inseparable relationship between sports and politics
• Simon Kuper Soccer's culture of corruption
• Nick De Marco New regulation of football intermediaries

Upcoming Events

• 26-27 October – ISLJ Annual Conference on International Sports Law, T.M.C. Asser Institute, The Hague, the Netherlands [We have only a couple of seats left, register now!]

Update: On 14 April footballleaks released a series of documents concerning Sporting de Gijón. Therefore, I have updated this blog on 19 April to take into account the new information provided.  

Doyen Sports’ TPO (or TPI) model has been touted as a “viable alternative source of finance much needed by the large majority of football clubs in Europe". These are the words of Doyen’s CEO, Nélio Lucas, during a debate on (the prohibition of) TPO held at the European Parliament in Brussels last January. During that same debate, La Liga’s president, Javier Tebas, contended that professional football clubs, as private undertakings, should have the right to obtain funding by private investors to, among other reasons, “pay off the club’s debts or to compete better”. Indeed, defendants of the TPO model continuously argue that third party investors, such as Doyen, only have the clubs’ best interests in mind, being the only ones capable and willing to prevent professional football clubs from going bankrupt. This claim constitutes an important argument for the defendants of the TPO model, such as La Liga and La Liga Portuguesa, who have jointly submitted a complaint in front of the European Commission against FIFA’s ban of the practice.[1]

The eruption of footballleaks provided the essential material necessary to test this claim. It allows us to better analyse and understand the functioning of third party investment and the consequences for clubs who use these services. The leaked contracts between Doyen and, for example, FC Twente, showed that the club’s short term financial boost came at the expense of its long-term financial stability. If a club is incapable of transferring players for at least the minimum price set in Doyen’s contracts, it will find itself in a financially more precarious situation than before signing the Economic Rights Participation Agreement (ERPA). TPO might have made FC Twente more competitive in the short run, in the long run it pushed the club (very) close to bankruptcy.

More than four months after its launch, footballleaks continues to publish documents from the football world, most notably Doyen’s ERPAs involving Spanish clubs. For this blog, our dataset will cover the two ERPAs between Doyen and Sporting de Gijón (found here and here); the ERPAs between Doyen and Sevilla FC for Kondogbia and Babá; the ERPAs between Doyen and Getafe for Abdelazziz Barreda and Pedro León; the ERPA between Doyen and Granada CF for Luís Martins; the ERPA between Doyen and Atlético Madrid for Josuha Guilavogui; and the ERPA between Doyen and Valencia CF for Dorlan Pabón.

The first part of this blog will provide background information on the recent economic history of Spanish football. The posterior in-depth analysis of the ERPAs will thus be placed in context. The blog will also include a table with the relevant facts from the ERPAs completed with the information included in an Excel document showing a map of deals and transactions allegedly conducted by Doyen and recently published on footballleaks. Relevant facts and figures that are not found in the ERPAs or in the Excel document, will be taken from the website www.transfermarkt.de. Based on the outcome of the analysis, we will attempt to conclude whether, and to what extent, the ERPAs have been profitable for the clubs involved, from a financial and competitive perspective.

Financial misery and TV rights inequality off the field

The financial misery

Spain was one of the countries most affected by the global financial crisis that commenced in 2008. The unemployment rate was above 25% for a long period of time and its budget deficit was about 10% from 2008 to 2012. The (professional) football sector also suffered from this general financial crisis. A study on the financial situation of Spanish clubs during the period 2007-2011 shows that by June 2011, 80% of La Liga clubs had a negative working capital. This meant that the clubs’ short term assets were not enough to cover the short term debts. The study further explains that the main reason for the financial difficulties is the excess of expenditures on players, i.e. paying transfer fees and salaries that clubs cannot afford. Not surprisingly, by 2011, half of the clubs from the Spanish first and second division had entered bankruptcy proceedings. A large part of the total debt was owed to the Spanish public authorities. In 2012, clubs in Spain's top two divisions collectively owed some €750 million to the tax authorities and another €600 million to the social security system. One of the teams who signed ERPAs with Doyen, Atlético Madrid, was known to have a tax debt which accounted for a fifth of the entire league’s tax debt. In fact, their tax debt of over €120 million amounted to over 60% of their annual revenue. Almost 40% of the clubs in the top two divisions presented negative equity, meaning that they were in clear need for funds from other parties. The general economic crisis prevented clubs to get these funds through normal means, like shareholders, members, sponsorships and bank loans. Local authorities were many times willing to aid their clubs. For example, the municipality of Gijón had rescued Sporting de Gijón by relocating its youth training facilities and subsequently buying the facilities for €12 million. Another example is that of Valencia CF. In its ambition to grow, the club decided to build a new stadium. The idea was to finance the new stadium by selling the old stadium. Once again, due to the financial crisis, and particularly the collapse of the housing market, it suddenly was incapable of selling the old stadium for the required price. The construction on the new stadium had already commenced with loaned money which could not be paid back. The municipality’s decision to place a State guarantee on this loan has been the subject of a formal State aid investigation by the European Commission.

TV Rights income inequality

One of the most important ways to generate income for professional football clubs is through the selling of TV rights. The Spanish clubs combined generated roughly €700 million per year from the selling of TV rights between 2010 and 2015.[2] This is slightly more than the €628 million the German Bundesliga was making per year between 2013 and 2016, but less than €940 million the Italian league was making in the 2012-13 season. The English Premier League is in a league of its own in this regard, which is making about €1.2 billion per year from the 2013-14 season onwards.[3]

Notwithstanding the total €700 million a year, most Spanish clubs do not derive enough money from selling the TV rights to compensate their losses. One has to keep in mind that where the clubs of Europe’s other major football leagues (e.g. England, Germany, France and Italy) were selling their TV rights jointly, Spanish clubs were still selling their TV rights individually. By means of the individual selling system, Spain’s two most popular clubs, Real Madrid and FC Barcelona, were capable of selling their TV rights for much more money than the other clubs. In the 2010/11 season for example, out of the €641 million generated in total, FC Barcelona got €163 million, whereas Real Madrid got €156 million. The remaining 16 clubs of La Liga had to share the remaining €322 million, which is slightly more than €20 million per club on average. By contrast, the ‘smaller clubs’ of the English Premier League were still making at least €49 million in that same season, which is two-and-a-half times as much as their Spanish counterparts.[4] Even the club that was earning least money in Italy in 2012, Pescara, was earning more per year from the selling of TV rights than the average Spanish club (€25 million).

Calls for a fairer distribution of TV rights income in Spain have been heard for years, particularly from the smaller clubs, but the switch to a joint selling system will only take place as of the start of the 2016-17 season. It is believed that continuous lobbying by Real Madrid and FC Barcelona against the joint selling system is the main reason for this delay. In a way, it could be argued that apart from reckless risks on the transfer market and the effects of the Spanish financial crisis, the dominant position of Real Madrid and FC Barcelona is what led to many Spanish clubs being in severe financial difficulties. The urge of these clubs to turn to investment companies like Doyen becomes more understandable, given that the system itself did not allow them from obtaining funds from other ‘normal’ sources.    

The ERPA’s and its aftermaths explained

On the day of writing this blog (12 April 2016), nine ERPAs between Doyen and Spanish football clubs were published on the website of footballleaks. The ERPAs are divided in two groups: Firstly, the ERPAs that proved to be successful for both the club and Doyen are analysed; the second part combines all the ERPAs in which the players concerned were either not sold for high enough profit, or not transferred at all. As will be shown, these ERPAs had mostly negative financial consequences for the clubs.

The successful ERPAS: Kondogbia and Barrada

Sevilla’s recent sporting successes, most notably winning the Europa League four times since 2006, are said to have been the result of a high level youth academy combined with an excellent scouting network. However, it has never been a secret that Sevilla made use of the services provided by Doyen, including the signing of ERPAs. In a well-publicised seminar on TPO that took place in April 2015, Sevilla defended the TPO model and made clear that it was against an outright ban of the practice. The ERPA concerning Geoffrey Kondogbia and his subsequent transfer to AS Monaco can explain why Sevilla is in favour of the TPO model. Kondogbia was transferred from RC Lens to Sevilla on the same date as the signing of the ERPA (26 July 2012) for €3 million. With the objective of obtaining 100% of the Economic rights, Doyen paid RC Lens the full amount of the transfer fee. In turn, Sevilla would buy from Doyen 50% of the economic rights for €1.65 million. Even though the minimum transfer fee was set by the parties at €6 million, Kondogbia was sold only one year later to AS Monaco for a staggering €20 million. An excellent deal for Doyen, which registered a profit of €7.89 million.[5] This ERPA is an example of a collaboration between a club and an investment fund, which has been highly profitable for both. With the “help” of Doyen, Sevilla managed to sign a young player and sell him for a profit not long after. However, as can be seen below, even Sevilla has signed ERPAs that have not been very beneficial for the club.

A second “successful ERPA” signed between Doyen and a Spanish club was the ERPA between Doyen and Getafe for Barrada. Similar to many other ERPAs, it stipulated that Getafe was not able to obtain financial support from the banking system due “to the current financial crisis”. Therefore, Getafe decided to sell 60% of the economic rights of one of its most promising young players for €1.5 million to Doyen. Both parties agreed that the minimum transfer value of Barrada was €5 million. Consequently, as can be deducted under paragraph 7 of the ERPA, Doyen’s minimum return would always be at least €3 million (60% of €5 million), guaranteeing Doyen a profit of €1.5 million (€3 million minimum return minus €1.5 million grant fee). The minimum return was easily surpassed after Barrada was transferred to Al-Jazira for €8.5 million in 2013. In accordance with Doyen’s own figures, the investment fund obtained €3.35 million for this transfer, a profit of 223%.[6]

The many “failed” ERPAs

Atlético Madrid was no novice to the practice of TPO when it sold 50% of Joshua Guivalogui’s economic rights for €5 million to Doyen. As can be seen from the ‘Map of Deals’, Atlético had previously sold 33% of the economic rights of the highly successful Atlético player, Falcao, to Doyen for €10 million. His later transfer to AS Monaco for €43 million was probably also economically beneficial for Atlético. Guivalogui, however, has been less successful wearing an Atlético shirt. He has played seven games in total for the club in two-and-a-half years, having been loaned to St-Étienne for the 2013-14 season, and to VfL Wolfsburg for the 2014-15 and 2015-16 seasons. If Wolfsburg decides to lift the option it has to buy Guivalogui for €4 million[7], Atlético Madrid will probably need to pay an additional amount to Doyen in order to reach the agreed minimum fee of €6.5 million.[8]

As regards Sevilla FC, where the ERPA concerning Kondogbia can be seen as “successful”, Babá’s ERPA tells a completely different story. Sevilla sold 20% of Babá’s economic rights for €660.000 to Doyen in 2012. Nonetheless, Babá never managed to secure a spot in the Sevilla squad and he was loaned out to Getafe and Levante between 2013 and 2015. After his contract expired with Sevilla in the summer of 2015, he moved back to his former club Marítimo as a free agent. Although Sevilla did not receive a fee for this transfer, Doyen still obtained a guaranteed profit of €148.000, as can be seen from the ‘map of deals’.

The Guivalogui ERPA and the Babá ERPA tell a similar story. Both players did not fulfil the expectations the clubs had of them at the moment Doyen bought parts of their economic rights. As a result, they were transferred, or are going to be transferred, for an amount well below the agreed minimum return. A similar run of events occurred with Luís Martins and Dorlan Pabon. Both players were not successful at Granada and Valencia respectively, and were transferred at a loss for the club. The exact figures of the transfers can be found in the table below.

The ERPA’s signed between Doyen and Sporting de Gijón are particularly interesting in terms of “failure”, because they illustrate perfectly the desperate situation the club found itself in. Sporting has been on the verge of disappearing not once, but several times in the last 10 to 15 years. In 2005, its total debt amounted to €51 million, with more than half owed to the public authorities. As a result, the club entered bankruptcy proceedings. In 2007, a settlement was reached between the club and its creditors. Even though the club still had a debt of €35.8 million, a Spanish court decided to terminate the bankruptcy proceedings. By the second half of 2011, the club presented a positive balance sheet at the shareholders’ general assembly for a fifth year in a row, but in reality Sporting was still acute financial difficulties, as the club would admit later on. It is this acute need for money that made the club turned to Doyen twice in less than a year. The fact that Sporting de Gijón is still alive today (albeit in danger of relegating to the second division), makes one wonder whether the ERPA with Doyen actually aided the club in its fight for survival or whether it worsened the situation in a similar way as FC Twente’s.

The first agreement concerns the purchase for €2 million of part of the economic rights of nine players who, at the time of signing, were registered as Sporting players.[9] Future transfers of one or more of these players would need to generate a profit of €7 million for Doyen.[10] The lifespan of the first agreement was not very long, as it was replaced by a second ERPA on 22 March 2012. Indeed, Sporting de Gijón stated officially on 23 February 2016 that the first ERPA never deployed any legal effects.

The first ERPA and the second ERPA between Doyen and Sporting show some clear similarities. For an amount of €2 million, Doyen buys 25% of the economic rights of all the players of both the first team and Sporting B (the second team).[11] This percentage remains 25% until Doyen obtains an amount of €7 million from the transfers of Sporting players to other clubs. Once this amount is reached, the percentage will be reduced to 15% until a further €3 million is earned by Doyen. Therefore, the minimum return Doyen should get is that of €10 million. Should Doyen not have received €7 million or more by 31 January 2015, the percentage of the economic rights owned by Doyen of all the Sporting and Sporting B players will be increased to 35%. Doyen's share of the economic rights would also increase to 35% if the club relegates from the first division (clause 2.5). A further important element of the ERPA is clause 4.1, by which Sporting names Doyen as the exclusive agent (intermediary) of the club for all transfer and loan operations of Sporting players. 

By using the ‘map of deals’ and transfermarkt, we have listed all Sporting and Sporting B players sold after March 2012. These players were:

-          Davud Barral – sold for €2 million to Orduspor on 5 July 2012;

-          Alberto Botía – sold for €3 million to Sevilla FC on 11 August 2012;

-          Miguel de las Cuevas – sold for €1.2 million to CA Osasuna on 1 July 2013;

-          Óscar Guido Trejo – sold for €2.7 million to FC Toulouse on 19 July 2013;

-          Borja López - sold for €2.2 million to AS Monaco on 2 August 2013;

-          Stefan Scepovic - sold for €2.56 million to Celtic FC on 1 September 2014.

A closer look at the ‘map of deals’ shows one important discrepancy compared to the ERPA of 22 March 2012. The share of economic rights owned by Doyen were not 25% (as stipulated in the ERPA), but 45%. Thanks to footballleaks' release of the so-called 'Escritura de Liquidación' on 14 April we now know what caused this increase. Firstly, in accordance with clause 2.5 of the ERPA, the economic rights owned by Doyen of all the Sporting players (except Botía and De las Cuevas) increased to 35%, since Sporting relegated to the second division in May 2012. Secondly, being an intermediary in all of these transfers, Doyen was entitled to an additional 10% of all the income generated from the transfers.[12] The ‘map of deals’ shows that the transfers of Sporting players has so far led to Doyen receiving more than €3.5 million, a profit of about €1.5 million for their €2 million investment. Nonetheless, this figure is still well short of the minimum return Doyen expects to get of €10 million. In other words, should the ERPA still be in force, Sporting is still required to sell more players if it is to meet its obligations towards Doyen.

Table summarizing the analysed ERPA’s signed between Doyen and Spanish clubs

Conclusion

The reason that many Spanish clubs decided to sell economic rights of players to companies like Doyen from about 2011 to 2015 (the year FIFA banned the practice) is relatively straightforward: The financial crisis was heavily felt in Spanish football, with many clubs incapable of paying off high debts owed to the public authorities. Moreover, the difference between the financial and competitive power of Real Madrid and FC Barcelona on the one hand, and all the other clubs on the other was only getting bigger. Not only did competing at national level become close to impossible, even smaller clubs from England were generating more than twice the revenues of Spanish clubs. The chances of being successful at European level were at risk.

Doyen was basically at the right place, at the right time. The ‘small’ Spanish clubs were in desperate need for money, either to compete or simply to survive, and Doyen was willing to give them this money in return for (part of) the economic rights of their football players. From the outside, it looks like a perfect match between club and investment fund. However, was TPO profitable for Spanish football clubs from a competitive and financial perspective?

From a financial perspective, the business is clearly lucrative for Doyen. As can be seen in the table, by investing €19.335 million it so far made a profit of €15.757 million.[13] In other words, an 81.5% profit! The same cannot be said for the clubs. Only the transfers of Barrada from Getafe to Al-Jazira and Kondogbia from Sevilla to AS Monaco were profitable. For all the other ERPAs, it appears that an a posteriori compensation to Doyen was necessary, because the amount obtained through the transfer could not cover the minimum return secured to Doyen in the ERPAs.

The legal discussions on TPO to a large extent focused on whether the practice leads to an unauthorized influence of third parties on the internal governance and policies of a club; and on whether a complete ban is contrary to (EU) competition law. Yet, the aspect that remains underexposed in the author’s opinion is the severe negative financial effect TPO can have on a football club. As we have discussed a couple of months ago in a blog on FC Twente, the financial position of the Dutch club deteriorated after signing the ERPA to such an extent that the club is now in serious danger of disappearing all together.

It is possible, though unlikely, that FC Twente’s downfall was an exception.  However, one should not underestimate Sporting de Gijon’s current financial situation, for example. A closer look at the ‘map of deals’ tells us that in March 2015 Sporting had only paid €250.000 of the €3.5 million it owed Doyen. A total debt of at least €3 million was confirmed in an official joined statement, dated 29 February 2016. The statement further holds that this debt has to be repaid before 2019, but one cannot help thinking that, for a club like Sporting de Gijón, this is easier said than done. Getting the money from future transfers should be complicated if Sporting only partially owns the economic rights of its own players, plus a looming relegation to the second division at the end of this season will not be beneficial either.[14]

[1] More information on the TPO ban can be found in our previous Blogs, such as “Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law – Introduction”.

[2] The total amount generated for the 2010/11 season was €641, see Mail Online, “Barca and Real consider sharing TV rights to make La Liga more competitive”; The total amount generated for the 2014/15 season was €742.5 million, see Marca, “Así será el reparto del dinero televisivo”.

[3] As of the 2016-17 season, The English Premier League will make €2.1 billion per year, see Mail Online, "Premier League set for £3bn windfall from global TV rights as rival broadcasters slug it out to screen England-based superstars"

[4] More information on the selling of TV rights in football can be found in our previous Blogs, such as “Why the European Commission will not star in the Spanish TV rights Telenovela”.

[5] See: Map of deals and transactions updated until 10 March 2015.

[6] See: Map of deals and transactions updated until 10 March 2015.

[7] Transfermarkt - Josuha Guilavogui.

[8] The original minimum return of €5.5 million set in September 2013 was increased every year by €500.000 until 1 September 2015, since Doyen continued to own 50% of the Guilavogui’s economic rights.

[9] The players concerned were Roberto Canella Suárez, Álvaro Bustos Sandoval, Alejandro Serrano García, Abdou Karim Tima, Mendy Formose, Juan Muñiz Gallego, Sergio Álvarez Díaz, Óscar Guido Trejo and David Barral Torres.

[10] In the first phase, Doyen receives a percentage of 50% of the economic rights of the nine players until Doyen received an amount of €5 million for the transfer of one or more of those players. After Doyen receives its first €5 million, Doyen’s ownership of the economic rights of the remaining players is to be reduced to 40% until Doyen received an additional €1 million. Once Doyen receives this additional €1 million, Doyen’s ownership of the economic rights of the remaining players would be reduced to 30% until Doyen again receives €1 million from the selling of those players. Consequently, the agreement stipulates that Doyen is to receive an amount equal or superior to €7 million for the transfer of players in which it partly owned the economic rights.

[11] As an exception, Doyen only gets 10% of the economic rights of the players Alberto Botía and Miguel de las Cuevas.

[12] Moreover, the 20% of the transfer fee for De las Cuevas that Sporting owed Doyen consisted of 10% for the economic rights and 10% as an agency fee.

[13] This figure might even get higher when taking into account that Doyen had a share in all Sporting de Gijón players and the fact that Pedro León is still registered as a Getafe player.

[14] With seven matches to go, Sporting finds itself in 17th place.