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.

The FIFA World Cup and the Poverty of Many Brazilians

Today is the start of the FIFA World Cup, held in Brazil. I will likely watch a game or two, but I don't know that much about the subject. Many economists have offered their predictions (e.g., here and here). NYT's 'The Upshot' has an extensive poll about people's attitudes towards the "beautiful game", which shows sympathies across nations (unsurprisingly, Argentinians want England to do poorly). Me, I won't offer any predictions at all. I do note, however, that Ladbrokes have Brazil as their favourite to win the lot, likely beating Argentina in the final. For higher odds, "dark-horse" teams with plenty of youth like Belgium and England might be worth betting on.

But the main point of this blog post is the discussion about Brazil hosting a costly event while many Brazilians live under highly unenviable material circumstances. Recent protestors have campaigned against spending money on building stadia rather than on housing. I don't know who's spending the money, which I would argue is extremely relevant to the issue. If it is private individuals, then I do not see any problem with building stadia rather than handing out alms; although the latter would of course be a very nice thing to do, the moral principle that one should not spend money on one's self because others can be helped cannot be maintained in a world of insatiable wants. Individuals can help others if they want to, but forcing them to do so is a breach of their sovereignty, their dignity, and their sense of being in control of themselves.

However, from the fact that the President of Brazil, Dilma Rousseff, has defended the World Cup, I surmise that it is really the Brazilian government which are constructing stadia. If there is to be a government, it should arguably spend tax-payers' money on socially useful projects. So then maybe the protestors have a point. By the argument made above, maybe the government should not have any money to begin with, but once the "damage has been made" the money might as well be spent wisely.

In this case, I do not see how the protestors' point is any less valid when applied to welfare payments to citizens of rich countries. After all, assuming away concerns about disincentive effects to work from transfer payments, those recipients are relatively well-off and not kept from abject squalor by hand-outs from the state. If this money were instead directed to the poor folks of the favelas (and again, if the disincentive effects to work are assumed away), a far greater success of poverty alleviation would have been achieved.

It may be objected that transfer payments going abroad only drain the nation's economy, but why should the calculus of altruism be restricted to nations? The loss to one "nation" is outweighed by the benefits to another. As long as the greatest wants are satisfied first, this means global gains of vast proportions, indeed. The fact that governments palpably do not work along these lines suggest to me some deep underlying problems in the mechanics of politics.

Of course, rather than sending money to Brazilians (and before them Haitians, Malawians and many, many poor people of other nations), rich countries could do something for which there is precedent, namely open their borders to these poor individuals. Food for thought while watching the games.