The Brazilian government has proposed the introduction of a ban on clubs selling player-transfer rights to investors in the latest development in the ongoing debate over third-party ownership (TPO).
The proposal is part of a wider bill that will be sent to Congress in a bid to improve the financial position of Brazilian football, the country’s Sports Ministry told Bloomberg. Clubs have unpaid tax debts of about R$4 billion (US$1.99 billion), according to Vicente Candido, a member of the ruling Workers’ Party on the lower house sports committee.
The government’s move comes after a group of Brazilian clubs last month claimed that outlawing TPO in football would negatively impact their financial status. The 21 clubs, which include reigning Campeonato Brasileiro Serie A champion Fluminense, along with Flamengo, Internacional and Santos, sent an open letter to FIFA expressing their concerns. UEFA general secretary Gianni Infantino in March stated that the controversial practice of TPO has “no place” in football. Infantino said that European football’s governing body is against TPO due to four key factors, including its potential impact on financial fair play regulations. FIFA says it is evaluating the “complex matter,” while UEFA has maintained it will seek to introduce its own ban if world football’s governing body fails to take action. TPO is said to be a $3 billion-a-year market and is common practice in southern Europe and South America.
Eduardo Carvalho Bandeira de Mello, president of Flamengo, has come out in opposition to the proposed legislation. “I don’t think it’s a case of changing the law,” he said. “It’s a case of managing your club better and to use this kind of partner in a way that’s good for both parties. But many times the club is in such a weak position that they don’t make good deals.”