Oliver Trentham
What third-party ownership actually means
Third-party ownership (TPO) occurs when someone other than a club owns a share of a player's economic rights. An investor might pay a club for the right to receive a percentage of any future transfer fee. The player still plays for a club, but the investor has a financial stake in the player's next move. This differs from standard representation, where an agent earns a commission. TPO can involve investment funds, consortiums, or individuals. The third party has no sporting role, only a financial one.
Under FIFA's regulations, TPO is banned in most competitions. The ban covers any arrangement where a third party can influence a club's transfer decisions or receive a share of a transfer fee. Narrow exceptions exist, such as owning a stake in a club that holds a player's registration. But broadly, the practice is prohibited.
The historic investment models
TPO became prominent in the 2000s, particularly in South America and Europe. Clubs with limited cash flow would sell a percentage of a player's economic rights to investors. For example, a club might retain 60% and sell 40% to a fund. When the player moved on, the fund received 40% of the fee. This model allowed clubs to fund transfers and wages without borrowing. It also gave investors a chance to profit from player development.
Two main models emerged:
- The percentage stake: An investor buys a fixed share of a player's economic rights, often between 10% and 50%.
- The investment fund: A pool of money buys stakes in several players, spreading risk. The fund might also provide loans to clubs secured against future transfer fees.
These models were common in Portugal, Spain, and Brazil. They were less common in the UK, but Premier League clubs did occasionally use them. The risk was that investors could pressure clubs to sell players to realise returns, potentially harming sporting performance.
Where the rules bite: FIFA, UEFA, and domestic bans
FIFA banned TPO globally in 2015, following pressure from UEFA and national associations. The ban is in the FIFA Regulations on the Status and Transfer of Players (RSTP). Article 18bis prohibits any third-party influence, and Article 18ter bans third-party ownership of economic rights. The rules apply to all international transfers and to domestic transfers in countries that have adopted the ban.
In England, the Football Association (FA) and the Premier League have their own rules. The Premier League's Rule V.5 prohibits any club from entering into an agreement that gives a third party a share of a player's transfer fee. The FA's regulations are similar. The English Football League (EFL) also bans TPO. Scotland has its own rules, aligned with FIFA's.
UEFA's Club Licensing and Financial Sustainability Regulations require clubs to disclose ownership structures. This is not a direct TPO ban but helps UEFA monitor for hidden third-party interests. Breaches can lead to fines, transfer bans, or exclusion from competitions.
Why clubs must disclose ownership structures
Disclosure is not just a box-ticking exercise. It is the primary tool regulators use to detect TPO. Clubs must provide details of their shareholders, directors, and any party with significant influence. This includes agents, intermediaries, and investment vehicles. If a club fails to disclose, it risks severe sanctions.
Why does this matter? Because TPO can be hidden behind complex corporate structures. An investor might own a stake in a club, which then owns a player's rights. Or a loan agreement might give a third party a claim on a future transfer fee. Without disclosure, regulators cannot see the full picture.
Disclosure also protects the club. If a dispute arises, a clear ownership record helps resolve who is entitled to what. It also prevents unexpected claims from third parties when a player is sold. In short, transparency is the best defence against regulatory action and commercial surprises.
Resolving disputes when ownership is challenged
Disputes over TPO often end up in arbitration. The Court of Arbitration for Sport (CAS) hears appeals against FIFA decisions. In the UK, the FA has its own arbitration panel, and the Premier League has disciplinary commissions. These bodies can impose sanctions and order compensation.
Common disputes include:
- Whether an arrangement is TPO: A club might argue that a payment is a loan, not a share of transfer rights. Regulators look at substance over form.
- Entitlement to a transfer fee: If a third party claims a percentage, the club may dispute the agreement's validity under the ban.
- Breach of disclosure rules: A club may face action for failing to report a third-party interest, even if the arrangement is not TPO.
Arbitration clauses in player contracts and investment agreements are critical. They determine the forum and the applicable law. Without them, disputes can become slow and expensive. Clubs should ensure any agreement with a third party includes a clear dispute resolution mechanism.
Practical steps for clubs and agents
If you are involved in a transfer, here is what you need to do:
- Audit existing arrangements: Check any historic investment or loan agreements for third-party rights. If they exist, seek legal advice on unwinding them.
- Disclose everything: Report all ownership and financial interests to the relevant league and governing body. When in doubt, disclose.
- Use standard contracts: Ensure player contracts and transfer agreements contain warranties that no third-party rights exist.
- Train your staff: Agents, finance teams, and directors should understand the TPO ban and the disclosure obligations.
- Seek arbitration-ready clauses: Include clear dispute resolution clauses in any agreement that touches on player rights.
The TPO ban is here to stay. Clubs that embrace transparency and robust contracts will avoid the pitfalls. Those that do not risk points deductions, transfer embargoes, and expensive arbitration. The message is simple: know your ownership, disclose it, and keep it clean.
