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Doyen Sports defends its Third Party Investment business model against FIFA’s unilateral ban in Brussels Court

Doyen Sports defends its Third Party Investment business model against FIFA’s unilateral ban in Brussels Court

Brussels, 13 July 2015 – Doyen Sports, a leading sports industry player, was present in a Brussels court for a hearing on its case to overturn FIFA’s ban on Third Party Investment (TPI) in football. Doyen Sports has challenged the ban, which has a global effect, with a complaint lodged with the Belgian national justice system. The ban goes against a number of the European Union’s Fundamental Freedoms and national competition rules.

Doyen Sports, which provides financial assistance to football clubs to allow them to build strong teams that challenge for some of the most important trophies in world football, believes that FIFA’s ban, which came into full effect on May 1st, will deprive clubs of a credible, sustainable source of finance and further tilt competitive balance in favour of the richest clubs in the world.

FIFA circular 1464 amends article 18 of that organisation’s Regulations on the Status and Transfer of Players to ban this practice worldwide. Doyen Sports believes that FIFA’s decision goes against several EU Fundamental Freedoms and rules. Besides the legal arguments, Doyen Sports highlights that this decision was taken against the advice and opinion of the vast majority of those consulted by FIFA itself, including those members of the working group that FIFA itself created, and then suspended, due to its independent and positive opinion on regulation of this activity, as opposed to an outright ban. 

Mr. Nélio Lucas, CEO of Doyen Sports said “We are very proud of what we have achieved in football so far. Our support to numerous clubs has helped them compete at the top level in world football. Look at Sevilla, who recently won their second consecutive Europa League title. FIFA’s decision could have a tragic effect for clubs and leagues in Europe. I fear that this decision will mean we won’t have Atletico Madrid breaking the duopoly in the Spanish League.”

 “The Third Party Investment model ensures that the club is entirely independent in its decisions on whether to transfer players, and that players themselves have the last say on where they want to play. We have no contractual relation with the players, all we do is provided loans, like banks do, to football clubs. This is why we call our model TPI, and not TPO: In no case do we ever own football players or their economic rights. ”

“We have always ensured that all our work is done with the utmost transparency: our company is regularly audited by a major international firm, and our accounts are delivered to the competent authorities. We are based in the European Union, not an obscure offshore territory. This is why we have decided to take this matter before the law. We have regularly defended the need to regulate the sector, and we have worked to produce proposals for regulation. We are still readily available to revisit these proposals”, concluded Mr. Lucas.

According to Mr. Jean-Louis Dupont, legal counsel for Doyen Sports, “hopefully, the courts will clearly see the merits of our arguments. It is a case of FIFA trying to impose its will and regulations, where these regulations clearly contradict the sovereign law of the European Union. We are sure that it is completely disproportionate and illegal to prohibit clubs from accessing a source of finance in what is ultimately an economic activity.”

The legal challenge is based on the restriction the ban imposes on a number of Fundamental Freedoms of the European Union:

 

Free competition

Modern football, besides a sport that has millions of passionate supporters worldwide, is also a major economic activity, generating significant revenue and accounting for millions of jobs. FIFA’s decision to ban the access to finance which allows clubs to compete on the market for football-generated revenues is clearly a limitation to freedom of competition. The effect of FIFA’s ban is the inability of many clubs to effectively compete on the transfer market for top talent, with which they can build competitive teams. FIFA, as the governing body of world football, is effectively abusing its dominant position to create an unfair competitive environment, benefitting the richest clubs.

 

Free movement of capital

The ban on TPI is a limitation on the free movement of capital within the EU. What FIFA’s circular does is effectively stop an entity, registered in one member state, from investing in another (a football club, for example) based in a different member state. 

 

Free movement of workers

TPI in football provides numerous opportunities for football players to change clubs, seeking bigger challenges and better conditions for themselves and their families. By banning TPI, FIFA is effectively restricting workers’ (football players, in this case) freedom to seek employment, to work, to exercise the right of establishment and to provide services in any Member State.

 

In many cases, it is this support in the form of investment that permits several clubs to be more competitive at domestic level, as can be seen by teams such as Atletico Madrid and Sevilla, which took full advantage of TPI and can effectively compete against clubs such as Barcelona and Real Madrid.

Several voices, besides Doyen Sports’, have made their concerns public. Frédéric Thiriez, former president of the French League and president of the Association of European Professional Football Leagues, says this ban will not solve any of football’s problems as a sport and as a competition and will remove opportunities from clubs and players that have been benefiting from this type of investment.

FIFA commissioned a report from CIES, International Centre for Sports Studies, on the impact of TPI on football, which concluded most leagues are not concerned by this type of investment. Another report from CDES, the Centre for the Law and Economics of Sport, also commissioned by FIFA, recommends that TPI should be regulated and not banned.

A decision on this case is expected by 24 July.

FIFA’s circular 1464 is also being challenged by the Portuguese and Spanish leagues together with Doyen Sports, in a complaint made directly to the European Commission. The Spanish Liga de Futbol Profisional and Liga Portugal are responsible for the professional leagues in their countries, representing a total of 42 clubs each.

Doyen Sports is represented by a legal team led by Jean-Louis Dupont and Martin Hissel. As well as an expert in European Law, Jean-Louis Dupont has been a key player in cases that helped shape football, such as the Bosman case in 1995, the “Meca-Medina” case in 2006 or in the “Charleroi case” in 2006.

 

About Doyen Sports

Doyen Sports Investments (DSI) is a private equity fund dedicated primarily to providing an alternative, sustainable source of funding for football clubs and sports associations.

We are a subsidiary of the multinational "The Doyen Group" (www.doyen-group.com), a holding company with stakes in several companies, operating in sectors such as oil and gas, mining, energy, tourism, construction, trading, retail, etc.

Doyen Sports is currently the most recognised private investment fund in the football sector, working closely with many teams, including Atlético Madrid, Benfica, Porto, Santos, Sevilla, FC Twente and Flamengo. We are proud to have contributed to the increased competitiveness of several teams, promoting the success of several clubs on the national and international scene.

Doyen Sports’ large investment capacity gives us the privilege of working with some of the best teams in the world.

Doyen Global, the marketing branch of the company, represents some of the top athletes worldwide such as Neymar, Beckham, Xavi Hernandez, Jorge Lorenzo or Boris Becker. It is currently producing a documentary on Usain Bolt, after having successfully produced a documentary on Manchester United’s class of 92. It is active in brand consultancy, image rights, communications, creative and commercial deals for some the sports industry’s leading players.

 

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