Sunday, 28 September 2014

Football Associations' Dislike of (Some) Property Rights

Football's ("soccer's") worldwide governing association are apparently attempting to ban third-party ownership of footballers (link will start an annoying video, though the video can be switched off), which means that one can play for a club "on loan" from some consortium or other owner-organization. The cited reason is that the phenomenon has been found to influence where players are going, which seems to be against FIFA regulations for some reason. European counterpart UEFA's official stance is similar:
"UEFA says the practice drains huge sums of money from the sport, and threatens the integrity of competitions when players are transferred regularly to generate profits. "It threatens the integrity of our competitions, damages football's image, poses a long-term threat to clubs' finances and even raises questions about human dignity,'' Platini said."
I don't see why third-party ownership's influencing where players are going should matter. All owners are apt to be interested in making money and so players go wherever there is most of it (provided that they want to themselves), irrespective of ownership. This means going to the club whose fans are willing to pay the most to see the player in action. So why would third-party ownership matter for footballers' destinations? Probably because it enables them to get around certain transfer rules or because transfers can be more difficult to negotiate with additional parties involved, but I am not sure.

UEFA's stance is odder still. The way in which the integrity of competitions is threatened by third-party ownership is not made clear in the article. Maybe (again) because the transfer rules are different, so that third-party-owned players can be signed even outwith the transfer window? (I don't know if this is the case.) I have to make yet more guesses as to why the phenomenon damages football's image or raises questions about human dignity.

Presumably Michel Platini (the head of UEFA) might think less of football, but maybe others will be attracted to the game, so it does not damage its image? The lost human dignity is perfect nonsense, since third-party ownership is an option, not an imposition. Rather, the dignity of individuals is damaged when they want to have a third-party ownership relationship but busybodies prevent it.

A footballer's transfer rights can be partially owned by a club, and partially by a third party, which may be the reason behind Platini's lament of the draining of "huge sums of money from the sport", since when a player is sold, it may be that only a small fraction of the transfer fee goes to the selling club. I suppose Plataini is forgetting that this means they also paid less for him in the first place. So no drainage.

On the whole, then, I do not see any problems with third-party ownership. I mentioned that transfers may be harder to negotiate, but nobody is forced to enter a third-party ownership arrangement ex ante, so probably the benefits exceed the costs. I suspect this proposed ban comes down to some influential clubs being unhappy with present arrangements and pressuring governing associations to take action. The losers if the ban goes through will probably be smaller clubs, unable to come up with the funds required to purchase 100 per cent of top players' transfer rights.

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