Football Dynasty-Chapter 32: Case Study: Agent and Ownership

During the pre-Bosman era, football transfers were heavily controlled by clubs.

Players were tied to their contracts, and clubs had significant power over transfers, meaning the selling club determined the transfer fee, which was then negotiated with the buying club.

There was no licensing system or registration scheme, which meant that anyone could become an agent. This was supported by the fact that many non-agents still assisted clubs and players with transfers.

Clubs could, for example pay people who were not registered as agents, such as scouts or other types of consultants, making the role of the "agent" unclear.

Long before he decided to become an agent, Richard had already conducted thorough research on every scenario and potential threats that could bite him in the future.

According to FIFA's calculations, in Europe, between 89% and 96% of all transfers worldwide were carried out by non-licensed agents acting as intermediaries, most of whom were family members of the players.

In England, for example, it was no longer a secret that players had restricted mobility under the transfer system. Even after their contracts expired, they could not move freely unless the club agreed to sell or release them. In some cases, players were forced to stay at clubs against their wishes.

Jean-Marc Bosman was trapped in this scenario, and it made Richard think long and hard. He didn't want to end up like him when FIFA began tightening regulations around football management.

In 1980s, FIFA's regulations did not explicitly prohibit an individual from simultaneously owning a football club and acting as a player's agent. However, just because it was allowed now didn't mean it would be allowed in the future.

This policy is designed to maintain the integrity of the sport by avoiding potential conflicts of interest. A football agent who is also an owner or significant shareholder might influence player negotiations for their own personal or financial gain.

So, how could he become both an agent and a club owner at the same time?

The answer is: he couldn't.

It was impossible.

The first case that came to Richard's mind was the famous European case of Gigi Becali, where his dual role was deemed problematic. It led to accusations of financial corruption, biased decision-making, and conflicts of interest that benefited him as an agent.

Eventually, FIFA's crackdown on this issue raised red flags for him and his club, causing significant turmoil. Becali faced legal challenges, was convicted of corruption, and sentenced to prison.

This happened from 2003 to 2011, which shows how determined FIFA is when they set their sights on you.

Can Richard guarantee that they won't place their eye on him when his player portfolio value is simply too absurd?

This eventually raised another concern for him: What if all the players he believes will become superstars in the future end up joining him?

Wouldn't his valuable knowledge about their potential eventually backfire on him?

Can he be certain that his fate won't mirror Becali's?

No one can guarantee that.

Truth be told, he believed his conflict with City board could work in his favor. While he was a major shareholder, he didn't directly involve himself in the day-to-day operations of the club, which technically didn't breach the regulations governing club officials and agents.

But in the future? What happens if the big six decide to pursue him, with FIFA and the FA joining forces? Just like how they pressured Sheikh Mansour's City for breaching FFP.

Once again, no one can guarantee that.

So, can he become an agent while being a major shareholder of City?

Yes, but it was risky and came with a deadline, forcing him to eventually let go of his status as an agent.

To be exact, a year from now, when the Bosman case goes public, it will take at least five years for the case to close and for player free agency to become part of FIFA's transfer rules, which means his time to become an agent can only last for six more years.

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Let's narrow the case according to current situation.

The second case: Richard vividly remembered one match that turned European football upside down, or it was Madridistas who turned social media upside down, demanding justice.

It was the game between Osasuna and Real Madrid.

During the match, a Spanish referee—whose name he couldn't recall—sent off Real Madrid star Bellingham for a remark the Englishman made.

Following the incident, suspicions arose that the referee might have had professional connections with a consulting and sports management company based in Spain.

"Hmm," Richard reflected quietly, as he circled the words 'professional connection' with the pen he was holding, using them as a keyword.

"Professional connection" here meant that the sports management company was neither owned by him nor by any of his family members.

What did Richard find here?

Richard, his aspiration is simple.

He would become a football agent first. Then, if the regulations became stricter, he would hand it over to his brother, allowing him to step back but still retain some influence in it.

As for his brother's dream of owning a supermarket, becoming an agent doesn't stop you from owning one, right?

However, when he remembered the incident regarding the referee, his hopes were dashed. Not even family members—just having a professional connection—could cause such a stir. So, you can imagine if he, as the owner of City, were involved in a scandal like this.

Richard decisively crosses out his brother Harry's name in the papers right in front of him.

There's a reason why, despite Manchester City's success in the modern football era, they can't rival Manchester United in terms of popularity.

They've bought their success, 115 alleged breaches, oil money, Abu Dhabi money, you name it. If he could summarize it in two words, it would be: financial hypocrisy.

You could say it like this: City spent the past three decades complaining about the money Manchester United spent and the glory hunters that followed. Now, they've become everything they once hated.

This is what worried Richard the most. He couldn't let City under him become a club that was never taken seriously, despite its success.

After scribbling and scratching furiously, no matter how much he racked his brain, he couldn't come up with a legal reason to retain his dual role in the years to come.

Law wasn't his forte, so couldn't he hire a specialist to handle this?

Of course, he could. And this is why Richard finally dared to accept the dual role.

It was 10 in the morning, and Richard had already arrived at Essex Street, standing in front of Blackstone House, the office of Blackstone Chambers.

With a deep breath, he walked up the steps, ready to face the challenge that awaited him inside.

Richard had an appointment with a barrister named Adam Lewis, who would later become known as The Premier League's go-to lawyer, and coincidentally, also represented Manchester City's FFP violation cases.

'Hmm, if I could build rapport and have him join my side...' Richard licked his lips.

The discussion with Lewis and his team lasted for six hours, and Richard could only sit obediently, struggling to keep his eyes open as fatigue took over.

'Academia is definitely not for me,' he muttered with a wry smile.

The pay was definitely good, but he couldn't stand the situation. He thought he could learn just by listening, but after twenty minutes, he had already gone through six cups of black coffee. If caffeine could fix confusion, he'd be a genius by now.

Blackstone charged him £1,000 per hour, and now it had been a six-hour discussion.

To make it clear, this was their fourth meeting, which meant, mathematically, he had already spent £24,000—just to listen to these barristers perform a group project, but with fancier clothes.

Thankfully, the recommendation was delivered in that same meeting.

First, he could collaborate or invest through third-party entities or external agencies. He could fund or support agents who work with or under him, using his resources to benefit both the players and the club, all while maintaining compliance with the licensing restrictions."

Richard rejected it immediately. This is similar to the case with the Spanish referee.

Second, he could build his own agency but completely delegate the direct agent roles to trusted associates or employees. This would mean he controls behind the scenes but is not involved upfront, thus allowing him to sidestep the restriction of being a licensed football agent himself.

Richard still rejected it. Becali's fate had already served as an example of what could happen.

Third, is to change Manchester City's model from private ownership to an association.

This would essentially adopt a system similar to the socios model used by Barcelona, Real Madrid, Athletic Bilbao, CA Osasuna. In this system, members who purchase an annual membership are granted the right to vote at the club's general meetings with a single, personal, and non-transferable vote.

In Richard's case, the only drawback is that he could own a percentage of Manchester City shares; however, there is a threshold where he could only hold a basic membership, entitling him to vote at the general meeting. Moreover, he would need to work his ass off to make this system work from scratch.

Richard decisively rejects it.

'Holy cow, it's hard enough trying to fully control City, but in the end, my vote wouldn't be 100%. What's the point?'

At times like this, Richard began to regret not taking over Watford directly. Sigh, if only he had gotten the information sooner, he would have acted right away. But then he slapped his cheeks.

He admitted that it was his fault for missing such an opportunity, but did he regret it?

No, he never did.

In fact, he had already envisioned a time when he could leverage the popularity of United to boost and build City's own local pride.

Regardless of United's success, if City could trample them for decades without winning, he believed Manchester could turn blue.

Of course, this was under the condition that there was no oil money behind it. The rivalry could serve as motivation to support the team and help it become stronger.

"Let's do it," he cheered himself.

After back-and-forth discussions and brainstorming, the best option was found in the ninth meeting.

Richard was exhausted but happy with the result. Third-Party Ownership (TPO) is the solution.

There is a reason why Richard directly bought Tony Cascarino's contract for £25,000 from Gillingham. It's to test the waters based on how Lewis and his team taught him.

Contract buyouts allow players to terminate their contracts early by paying a predetermined amount, usually specified in the player's contract as a 'buyout clause' or 'release clause.'

'Buyout clause' or 'release clause' is definitely modern football jargon.

In the context of the 1980s, it can be simply said that as long as he was willing to pay the amount agreed upon, he could essentially negotiate the release of the player.

Since then, the buyout clause has become Richard's style in becoming an agent.

The loophole is like this:

Richard buys shares in the economic rights of young players and often covers the costs of their training and accommodation. In return, he is entitled to a percentage of the player's future transfer fee.

In legal terms, it is 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. At that point, the player is sold to another club, and the agent earns a percentage of the transfer fees.

And in Richard's terms, owning the contract allows him, as the third-party owner, to increase his own profits by "parking a player" at a club temporarily until the player's value appreciates.

The famous case that brought this ownership model into the public eye and sparked heavy criticism occurred in 2006 when Carlos Tevez and Javier Mascherano moved to West Ham United.

However, their economic rights were owned by a company called Media Sports Investment (MSI), led by Iranian businessman Kia Joorabchian. This arrangement allowed MSI to receive a portion of the players' transfer fees and wages

Sensitive to an issue that may arise later, Richard definitely avoided the word 'wages,' but when it comes to transfer fees, could he later mark them up just like Mino Raiola marked up Pogba's fees to United?

The key to this kind of scheme lies in building strong rapport with the players, but for Richard, that was never a problem.

In fact, he confidently believed that out of all the agents in the world, he was the only one who could pull this off flawlessly.

It was unclear what different roles the agents had in connection with a transfer in the current era, as they could act as representatives of both clubs and players, and switch sides from one transfer to another. This meant they could turn their back on a player and act for their own benefit.

Only super agents like Eric Hall, Jonathan Barnett, or Pini Zahavi, who had the ability to build a strong reputation, could likely become his competitor in this case. So, isn't becoming an agent the best choice for him now?

After all, who else would be willing to provide a player with a house, cover transportation and living expenses, and even manage their schooling and family needs?