Third-Party Ownership (TPO) in association football is the ownership of a player's economic rights by third-party sources. The third-party—which can be an agent such as a football agent, an agency, such as a sports-management agency, a company, investors such as a hedge-fund, or a single investor—"takes ownership of all or part of the financial rights to a player".[1][2] In some cases when a footballer is sold, the TPO, not the football club, can benefit from transfer fees and contract negotiations fees.[1] Note that this differs from co-ownership in football, where a player's transfer rights are shared between two clubs.[3]
The practice has also been widely used in football in South America, particularly in countries such as Brazil and Argentina, with a system of players, clubs, agents, teams, and investors involved. It is associated with football clubs with few financial options that face financial hardship, and are sometimes insolvent.[1] By 2007, TPOs had become common practice in football in Portugal, Spain and Russia.[1]
According to a 2007 article in The Guardian and academic articles,[3] businessmen or other investors buy shares in the economic rights of young players and often cover the costs of their training and accommodation. In return they are entitled to a percentage of a player's future transfer fee.[4] A 2016 article in the Mirror, explained how third-party owners may either purchase a percentage of a player's "economic rights" from the club, or even purchase a player's contract.[3] Owning the contract allows the third-party owner to increase profits by "parking a player" at a club temporarily until the player's value appreciates, at which time he is sold to another club and the agent earns a percentage of the transfer fees.[1]
In April 2015, FIFA announced the banning of third-party ownership, and specifically prohibited either clubs or players from entering into economic rights agreements with third-party investors.[5] The ban took effect on 1 May 2015. The European Parliament also announced a similar ban in European sports on 11 November 2015 following the passing of Rule 136 of Parliament's Rules of Procedure. In a written declaration, the European Parliament states that third-party ownership raises concerns over the integrity of competitions and introduces risks of criminal activities into sports.[6]
According to a 2015 Bloomberg News article, the Football Leaks uncovered secretive "financing practice for the global sport" with "one of the biggest firms investing millions in soccer-player futures".[7]
One method of circumventing the 2015 FIFA ban is to utilise a floating charge over designated accounts where the proceeds of player transfers is paid into.[3] This was notably used by FC Porto.[3]