England football manager Sam Allardyce is being investigated by the Football Association (FA) for allegedly advising fake foreign businessmen on how to “get around” strict rules on player transfers.
Allardyce, who has managed the national team in just one game since being appointed in late July, allegedly negotiated what he thought was £400,000 deal to be an ambassador abroad and advise foreign investors on how to profit from third-party ownership of Premier League footballers.
The businessmen were actually undercover journalists from the Telegraph. The newspaper says the FA held talks with Allardyce on Monday evening, with the manager facing the very real prospect of losing the job he spent years dreaming of having.
Here is a quick explanation of what third-party ownership is and why this is a really huge deal.
What is third-party ownership?
It may seem complex but the clue is in the name.
Third-party ownership is when a third party, usually a company or agent, owns some financial rights of a football player. In practice, this means that when as player is sold, the third party will receive a share of the transfer fees.
This practice is most common in South American football. Third parties there offer to pay clubs large amounts of money in exchange for a share of a player’s financial rights.
Some clubs argue third-party ownership is a good thing as it allows teams to sign players who would otherwise be far too expensive. This was the case when relegation-threatened West Ham signed Carlos Tevez and Javier Mascherano in 2006 — an example we explain in more detail later in the article.
Michel Platini, the former president of European football authority UEFA, however, described the practice as “shameful” and a “type of slavery” last year.
When did it become a big deal in British football?
Third-party ownership rose to prominence in 2006, when West Ham United, a club Allardyce once managed, spent an undisclosed fee on two Argentinian internationals, Tevez and Mascherano, whose financial rights were part-owned by a firm based in London.
The regulations the FA had in place to prevent third-party ownership a decade ago were not as robust as they are now. However, after a major investigation, West Ham was fined £5.5 million.
The club was found guilty of breaching rules banning third parties from having significant influence over player transfers. The FA found that the terms of the players’ contract meant the firm had the right to decide whether they would transfer to another club and for what fee.
Has “Big Sam” done anything illegal?
No. Giving advice on third-party ownership isn’t illegal.
The issue here is that Allardyce allegedly gave advice on how to carry out a practice which has been banned both by the world’s most powerful football body, FIFA, in 2015, and awkwardly, his own employers, the FA, in 2008.
Allardyce, like all previous England managers, isn’t just expected to deliver on-the-pitch success.
He is a national ambassador which means, at a minimum, he is expected to avoid doing or saying anything which reflects badly on himself, his employers, or the English game.
Telling businessmen it is “not a problem” to dodge rules put into place by your own employers is not a good look.