New TPO Regulations – Traffic finalises sale of Estoril Praia

New TPO Regulations – Traffic finalises sale of Estoril Praia

This week the sport-marketing group Traffic has finalised the sale of Portuguese football club Estoril Praia SAD. The move comes as a bit of a surprise as the agency had already previously sold its Brazilian development club Desportivo Brasil to a Chinese consortium. Traffic’s fire sale is connected to new rules introduced by FIFA and UEFA, which will effectively ban the practice of Third-Party Ownership (TPOs) contracts in European football with the start of the 2015/16 season. In Brazil where the season starts in January the new rule has already come into affect, and has resulted in a downturn of transfers as many clubs have previously relied on investors to own part of the player contracts. Agents and sports lawyers alike heavily criticized the new rules, as many football clubs in South America and southern Europe rely on TPO contracts as an investment strategy. Earlier in the spring Jochen Lösch told Bloomberg that FIFA’s ban of TPOs is irrelevant, because “FIFA is not a law maker”. But it seems Traffic is now reconsidering their investment portfolio in football. After the sale of their Brazilian club Desportivo it was believed that Traffic would then focus on Estoril SAD as it was understood that the club could offer a legal means to develop players in Europe without having to rely on TPO agreements. Furthermore, the club’s location in Portugal meant that Traffic had a legal holding within the European Union, which could have given the agency an effective legal tool to fight FIFA’s rules on TPOs in European courts. It now appears, however, that Traffic, which held 74.5% of the share in the Estoril Praia, has decided to sell the Portuguese club as well. According to the Portuguese sports portal Correio da Manhã, Traffic has sold the club including the transfer rights to all the players to the investment fund Fidelis, which is owned by a Dubai investment consortium based in Britain. The sale of Estoril Praia by Traffic highlights the impact of FIFA’s new TPO regulations on smaller clubs in southern Europe. Estoril Praia is now in turmoil as the sales agreement also included provisions by Fidelis that the president, vice president, and sports director would all step down from their posts, leaving the club without any viable leadership. Furthermore, football in Portugal has always been highly dependent on the investment of player agencies, and through these agency contacts had been able to bring in some of the best talent from South America. This talent and financial pipeline now appears to be closing and it remains doubtful whether all clubs can fill the financial void left by FIFA’s TPO regulations. By Manuel Veth -

This week the sport-marketing group Traffic has finalised the sale of Portuguese football club Estoril Praia SAD. The move comes as a bit of a surprise as the agency had already previously sold its Brazilian development club Desportivo Brasil to a Chinese consortium.

Traffic’s fire sale is connected to new rules introduced by FIFA and UEFA, which will effectively ban the practice of Third-Party Ownership (TPOs) contracts in European football with the start of the 2015/16 season. In Brazil where the season starts in January the new rule has already come into affect, and has resulted in a downturn of transfers as many clubs have previously relied on investors to own part of the player contracts.

Agents and sports lawyers alike heavily criticized the new rules, as many football clubs in South America and southern Europe rely on TPO contracts as an investment strategy. Earlier in the spring Jochen Lösch told Bloomberg that FIFA’s ban of TPOs is irrelevant, because “FIFA is not a law maker”. But it seems Traffic is now reconsidering their investment portfolio in football.

After the sale of their Brazilian club Desportivo it was believed that Traffic would then focus on Estoril Praia as it was understood that the club could offer a legal means to develop players in Europe without having to rely on TPO agreements. Furthermore, the club’s location in Portugal meant that Traffic had a legal holding within the European Union, which could have given the agency an effective legal tool to fight FIFA’s rules on TPOs in European courts.

It now appears, however, that Traffic, which held 74.5% of the share in the Estoril Praia, has decided to sell the Portuguese club as well. According to the Portuguese sports portal Correio da Manhã, Traffic has sold the club including the transfer rights to all the players to the investment fund Fidelis, which is owned by a Dubai investment consortium based in Britain.

The sale of Estoril Praia by Traffic highlights the impact of FIFA’s new TPO regulations on smaller clubs in southern Europe. Estoril Praia is now in turmoil as the sales agreement also included provisions by Fidelis that the president, vice president, and sports director would all step down from their posts, leaving the club without any viable leadership.

Furthermore, football in Portugal has always been highly dependent on the investment of player agencies, and through these agency contacts had been able to bring in some of the best talent from South America. This talent and financial pipeline now appears to be closing and it remains doubtful whether all clubs can fill the financial void left by FIFA’s TPO regulations.

By Manuel Veth

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