Football Banned Investors From Owning a Share of a Player

What the arrangement was

A club signs a promising 19-year-old and cannot afford the fee. An investment fund pays part of it, and in exchange receives a percentage of whatever the player is eventually sold for.

That percentage is the player’s economic rights — not ownership of the person, and not the registration, which stays with the club. It is a financial interest in a future transaction.

For clubs with more talent than cash, particularly in South America and Portugal, it was transformative. A selling club could realise value from a player years before selling him, and fund a squad it could not otherwise assemble.

And why FIFA prohibited it

The Executive Committee decided in December 2014 to ban the practice, with a transition from 1 January to 30 April 2015. Article 18ter took effect on 1 May 2015, prohibiting clubs and players from assigning to any third party a right to, or participation in, the compensation payable for a future transfer.

The stated grounds were the independence of clubs and players and the integrity of matches and competitions.

The concern is specific and easy to state. An investor holding 40% of a player’s next transfer fee has a direct financial interest in that transfer happening, happening soon, and happening at the highest price.

They do not need to own the club to act on that interest. They need only influence — over whether the player is selected and therefore visible, over which offers a club entertains, over whether a contract is renewed. And when the same fund holds stakes in players at several clubs, including clubs that play each other, the integrity problem stops being hypothetical.

Which is why 18bis exists alongside it

The companion provision, Article 18bis, prohibits a club from entering any contract that lets another party acquire the ability to influence its employment and transfer-related matters, or its independence or policies.

Read the two together and the design is clear.

18ter removes the financial stake.

18bis removes the influence, whoever holds it and whatever it was bought with.

That belt-and-braces structure is deliberate, because the influence is the actual harm and the stake was merely the most common route to it. A ban on the stake alone would have been engineered around within a season.

The argument on the other side

The prohibition was not universally welcomed, and the objection deserves stating.

TPO was a financing mechanism for clubs in leagues that cannot compete on revenue. Banning it did not create money for those clubs; it removed a way of raising it, and the predictable effect is that selling clubs sell earlier and cheaper, because they can no longer bridge the gap while a player appreciates.

There is also a competition-law question, of the same kind that has troubled FIFA’s agent regulations — a prohibition on a category of investment, imposed by an association of the buyers, has been challenged as a restraint on trade, and the litigation has run for years.

So the ban is best understood as football choosing integrity over liquidity, knowingly, at a cost borne mostly by clubs outside the wealthiest leagues.

Compare the squad cost ratio and Financial Fair Play: every financial rule in football turns out to protect somebody, and the argument is always about who.

What replaced it

Nothing, exactly — which is the point.

Clubs still need to finance transfers, and the money now comes through loans against future receipts, sell-on clauses negotiated between clubs, and owner funding. Those are permitted because the counterparty is either a bank with no sporting interest or another club already inside the regulatory system.

Sell-on clauses do something structurally similar to TPO — a selling club retains a percentage of the next transfer — but the holder is a club, bound by FIFA’s rules and subject to its jurisdiction, not an outside fund answerable to nobody in football.

That distinction is the whole of the regulation. FIFA did not object to a third party profiting from a transfer. It objected to a party that could profit from a transfer while sitting outside the rules of the game.

For the rest of the transfer system, see football transfer rules and the Bosman ruling.