Top ten tips to understand third party investment in football players

With third party investment in football players (TPI) becoming a hot topic for discussion at present, I thought it would be useful to briefly set out my top ten tips to help understand the key concepts.

1. TPI in the football industry is where a football club does not own, or is not entitled to, 100% of the future transfer value of a player that is registered to play for that team. There are numerous models for third party player agreements but the basic premise is that companies, businesses and/or individuals provide football clubs or players with money in return for owning a percentage of a player’s future transfer value. This transfer value is also commonly referred to as a player’s economic rights. There are instances where entities will act as speculators by purchasing a percentage share in a player directly from a club in return for a lump sum that the club can then use as it wishes.

2. The Premier League, Football League, Football Association, the Polish and French leagues have all implemented regulations to prohibit TPI in their leagues. There appears to be a growing tide of opinion against TPI. The original prohibition regulations in the Premier League came as a result of the Tevez affair where a third party owner had the contractual right to force West Ham to sell the player if a suitable bid was received. This was against the current regulations that were in place at the time. Subsequently, the Premier League tightened its regulations to prohibit any type of TPI. Other leagues swiftly followed.