Third parties’ rights to receive income from transfers of football players

The tenth issue of Sports Law Bulletin in 2012 was published. It is dedicated to the legal regulation of third persons’ rights to football player economic rights (third party ownership, TPO) in different countries. Mikhail Prokopets, Head of Sports Law Practice of the Law Firm "YUST", was the expert on the legal regulation of TPO in Russia.

In his article, M.Prokopets explained the TPO mechanism. In a classic TPO, the investor becomes entitled to a part of the future transfer amount received by the club from the “sale” of a certain player, in exchange for a cash contribution to the development of the club (a variant – in exchange for the expenses of the “upbringing” of a certain player). The club also clearly benefits from this scheme, as it lowers the costs of “upbringing” of a certain player.

TPO is widely applied in the world, despite this it is rarely used in Russia. The author believes that the lack of talented players, which excludes the possibility for the third party to obtain significant profits from the sale of such player, is the most important cause of this. Another cause – frequent bankruptcy of football clubs and the impossibility to consider TPO-related disputes in the dispute settlement bodies of the Russian Football Union.

Besides, Russian legislation and regulation provisions of the Russian Football Union provide no regulation of TPO relations. In Russian law, the institution of conditioned transaction is the closest to TPO, but there is no court practice whatever of application of TPO and validity of such agreements in Russia.

One of the conclusions of the analysis, which M.Prokopets draws concluding the publication, is that TPO will not become popular in Russia in the next several years.

The publication is available in the printed version of Sports Law Bulletin, 2012, No. 10 or here.