What has the Marcos Rojo case taught us about third party investment in footballers?

Published 16 March 2016 By: Luís Villas-Boas Pires


This is the author’s second of two articles that aim to update the reader about current goings-on in the world of third party ownership (TPO) following FIFA’s ban of the practice in December 2014.

The first article recapped the main points of the TPO ban and then examined a number of the principal alternative investment models that have come to the author’s attention that ostensibly allow third party investors to continue to participate in the market without breaching the terms of Article 18ter.1

This second article examines the case between Doyen Sports Investment Limited (Doyen) and Sporting Clube de Portugal (Sporting), concerning the disputed validity of two economic rights participation agreements relating to the players Marcos Rojo and Zakaria Labyad.

In December 2015, the Court of Arbitration for Sport (CAS) found in favor of Doyen,2 ruling that the agreements were valid and their terms enforceable. While unfortunately the CAS’s full decision and reasoning has not been made public, the agreement itself is available on the website footballleaks.3

Accordingly, a preliminary analysis of the case based upon an examination of its facts, the terms of agreement relating to Marcos Rojo, and other public information is now possible.



According to public statements made by Sporting on the Portuguese Securities Commission´s website (on 144 and 19 August 20145), the club terminated the agreements with Doyen for the players Marcos Rojo and Zakaria Labyad with just cause and, as a result, "SPORTING SAD informs that it will immediately refund Doyen for the amount invested by this entity, in accordance with the applicable law." That refund took place in the amount of 3 million euros.

Sporting’s annual report6 also mentions that the club believes that Doyen breached the obligation stated in the economic rights participation agreement of not interfering in the internal policy of the club, not making pressure on the transfer of the player and of confidentiality. In addition, Sporting defends that such agreement is null and void on grounds of immorality and illegality.

The alleged interference of Doyen in the transfer process is mentioned in the above press release, in particular the reference to "illegitimate interference and pressures that were being conducted by the CEO of Doyen, Mr. Nelio Lucas" and the fact that Sporting "never gave into the pressures and interference which were systematically practiced by Doyen".7



On 14 August 2014, Sporting sent a letter to Doyen terminating, with just cause and immediate effect, the economic rights participation agreement. In that same letter Sporting, also states that such agreement was null and void in any event. More details on what concerns these arguments will be given later in this article.

On 21 August 2014, Doyen responded to Sporting, rejecting the termination of the referred agreement and also stating that the same was valid and enforceable. As a result, Doyen sent the relevant invoice for the amounts to be paid by Sporting in accordance with clause 7 of the economic rights participation agreement, since Rojo was transferred to Manchester United.

In fact, on 19 August 2014, Sporting has transferred Rojo to Manchester United under the following conditions:

  1. the amount of € 20.000.000 to be paid in the three installments,
    1. € 10.000.000 to be paid immediately;
    2. € 5.000.000 to be paid on 1 December 2014;
    3. € 5.000.000 to be paid on 1 July 2015; and
  2. the 20% of the capital gain of any future transfer above the amount of € 23.000.000 and (c) the loan of the football player “Nani”, free of charges for Sporting during the season 2014/2015.

In response to Doyen’s letter, Sporting returned the invoice and paid to Doyen € 4.500.000, which the latter assumed as a partial payment of the sum owed by Sporting for the transfer of Rojo.

Following the exchange of these letters, both parties decided to present their own statement claim and relevant response before the CAS.8 There respective arguments can be summarized as follows.


Arguments of the parties


In short, Doyen argued that:

  1. the economic rights participation agreement signed between both parties is valid and binding under Swiss law<;9
  2. no general causes of nullity are applicable to the agreement (e.g., the agreement is not be considered as impossible, unlawful or with a serious imbalance between the obligations of the parties,10 or there are grounds for the rescission of the agreement for unfair advantage, for essential error or for duress11); and
  3. has not breached the clauses 6.2,12 1413 or 2014 of the agreement;

and as a result, the agreement is still bound and enforceable in its entirety for both parties.

Since the agreement is still valid and enforceable to both parties based on that arguments and legal grounds, Doyen believes they are entitled to receive from Sporting:

  • 75% of € 20.000.000 (i.e., € 15.000.000);
  • 75% of the economic value of the loan of the football player “Nani” (who was loaned free of charge by Manchester United to Sporting);
  • 75% to applied to the 20% of the excess of any future transfer fee of Rojo from Manchester United above the amount of € 23.000.000; and
  • 5% interest on the above amounts


On the other hand, Sporting argued that:

  1. the agreement is null and void on grounds of:
    1. immorality (e.g., offence to public morality,15 infringement on economic freedom and produce market disturbances);
    2. illegality (e.g. contravene Swiss law,16 EU law,17 personality rights18); and
    3. in case the Panel consider that the agreement is valid, Sporting has validly terminate it with just cause (as provided in articles 107 and 108 of the Swiss Code of Obligations) on grounds of a material breach of Doyen of its obligations under the clauses 5.1,19 6.2, 14 and 20 of the agreement

As a result of these arguments and legal grounds, Sporting counterclaims that they have the right to be compensated for damages:

  • in the amount of € 10.000.000 as a result of the repeated contractual breaches of Doyen by imposing a considerable pressure on the transfer of Rojo;20 and
  • in the amount of € 3.000.000 due to violation of Sporting personality rights (e.g. image and reputation) by Doyen as provided in the articles 49, 42 (2) and 43 of the Swiss Code of Obligations


The economic rights participation agreement between Sporting and Doyen relating to Rojo

In order to better understand how its legal and financial structure works, let’s now look at main topics of the economic rights participation agreement executed between Sporting and Doyen on 23 August 2012.


Firstly, the scope of this agreement is the sale by Sporting to Doyen of 75% of the player’s economic rights for a price equivalent to 3,000,000 Euros and, as a result, Sporting shall be the owner of 25% of those rights, while Doyen owns the rest.

The economic right defined under this agreement is the financial value stemming of the player´s registration rights and includes, for example,

  1. any transfer fee, or
  2. any payment made under the agreement to the player in lieu of a transfer fee where the player extends his contract with the club, or
  3. any compensation arising from the termination of the employment contract,21 or
  4. the values from the assignment or exploitation of the image rights of the player by any third party.

To sum up, Doyen is entitled to a share equal to 75% of the proceeds relating to any of the following:

  • Transfer,
  • Loan,
  • Compensation for the termination of the employment contract,
  • Insurance claim,
  • Transfer offer that is rejected,
  • Player becoming a free agent,
  • Re-Signing with the Club.

The Transfer

A transfer is deemed to take place, under this agreement, whenever the player enters into a new employment contract with a new club, which is subject to the transfer and registrations of the player from the old club to the the new club, and when the player is duly registered with the relevant football association on a permanent basis.

How does the transfer process work under the agreement? Primarily, Sporting had a duty to notify Doyen of all negotiations concerning any potential transfer, although the latter is prohibited from contacting or interfering in any way whatsoever with any of the parties which is directly or indirectly involved in the negotiations of the potential transfer. However, Doyen may be involved in the transfer negotiations where Sporting provides a written authorization for that purpose.

In addition, both parties declare in the agreement the amount of 8,000,000 Euros to be a reasonable transfer offer and market value for the player and this trigger is crucial to understanding the rest of the transfer process. The below described transfer process aims at preserving (or capitalizing) the amount invested by Doyen in the future realized transfer value of Rojo.

Transfer offer not accepted by Sporting

So, in the case of a transfer offer equal or greater than 8,000,000 Euros, if so requested by Doyen, Sporting shall be obliged to either accept the offer or compensate Doyen. For example, if Sporting gets an offer for Rojo in the total amount of 8,000,000 Euros and Sporting decides not to accept but Doyen does, the referred club shall pay Doyen 6,000,000 Euros (which is equivalent to 75% of the transfer fee proposed by the transferee club).

On the other hand, if the transfer offer is equal to or greater than the amount of the fee paid by Doyen (3,000,000 Euros) and below the amount of 8,000,000 Euros, at Doyen´s discretion, Sporting shall be obliged to make a payment to the Doyen equal to higher of, i) the referred fee (3,000,000 Euros) or ii) 75% of the proposed transfer fee made by the transferee club.

Using the same example, if Sporting gets an offer for Rojo in the total amount of 3,000,000 Euros and Sporting decides not to accept but Doyen does, the referred club shall pay to Doyen 3,000,000 Euros (which is the equivalent to the fee initially paid by Doyen), as it is higher than 75% of the proposed transfer fee made by the transferee club.

If the transfer involves the exchange of players, Doyen will have the option to either (i) substitute the 75% of the future realized transfer fee of the new player targeted by that exchange or (ii) demand Sporting pay Doyen an amount equal to 4,200,000 Euros.22

Transfer offer accepted by Sporting

In the case the transfer offer is accepted by Sporting and the transfer of Rojo is completed (i.e., the relevant transfer fee is received by the club), the latter shall pay Doyen the higher of 4,200,000 Euros or Doyen´s interest in the transfer fee (i.e., 75%).

Here is an example to illustrate this scenario: if Sporting receives and accepts an offer for Rojo in the total amount of 4,000,000 Euros, then the referred club shall pay Doyen the amount of 4,200,000 Euros (which is higher than 75% of the proposed transfer fee made by the transferee club – i.e., 3,000,000 Euros).

Any amount to be paid to intermediaries, agents, solidarity mechanism contributions, training compensations shall be borne exclusively by Sporting.


As for the loan of the player, Doyen is also entitled to a fee. Under the agreement, a loan is where the club permits the player to play temporarily for another club, but where no permanent transfer takes place.

When there is a loan, Sporting shall pay Doyen 75% of the fee or compensation paid to Sporting by any third party in consideration for or compensation for the loan of the player.

Following the same logic as the transfer process mentioned above, when Doyen does not accept the loan but Sporting decides to proceed with it, if the club borrowing the player assumes the payment of his salary as part of the loan agreement, such salary undertaking by the borrowing club will be considered part of the fee mentioned in the previous paragraph. In other words, Sporting shall pay Doyen an additional amount equal to 75%, if the player’s salary is undertaken by the club borrowing the player.

Compensation for termination of the employment contract

The economic rights of the player under this agreement also include compensation arising from the termination of the employment contract, i.e., damages for which the player or any other club is liable as a result of termination without just cause of the employment contract or arising from the inducement to unlawfully terminate the employment contract.

Where the player terminates the employment contract without just cause, Sporting shall pursue a claim against the player before any competent entity or court (FIFA, CAS, Portuguese FA). In the event such entity or court decides in favor of Sporting, the latter shall pay Doyen the higher of an amount equivalent to 75% of such award or 3,708,000 Euros.23

Insurance claim

While the agreement is in force, Sporting shall enter into and maintain an insurance policy insuring the risk of the player’s death and the risk of the player suffering an incapacitating injury or any injury, which may patently reduce the player’s ability as a professional player in a minimum amount of 3,708,000 Euros (i.e., the put option fee).

If the club makes a claim against the insurance company, Sporting shall distribute 100% of the proceeds from that insurance policy claim to Doyen. In the event such proceeds are less than the put option fee, Sporting shall pay the difference.

Player becomes a free agent

If the player becomes a free agent, one would assume Doyen would probably lose part of its investment, which is not the case in this agreement.

In fact, in the event the player is considered by any competent entity or court (FIFA, CAS, Portuguese FA) to be a free agent, then Sporting shall pay Doyen 4,200,000 Euros (for what is called in the agreement Doyen’s minimum interest fee).

This amount (agreed by both parties) represents a genuine pre-estimate of the minimum expectation of Doyen’s interest in the future transfer fee of the player (or the minimum loss that would be suffered by Doyen). In the authors opinion this represents liquidated damages for breach of contract.

Re-Signs with the Club

As mentioned above, the rights of Doyen in the player also include the financial value in relation to the player’s re-signing24 with the club. So, when the re-signing takes place without Doyen´s prior consent, Doyen, at its own discretion, will have the following options:

  • Request Sporting pay 4,200,000 Euros (Doyen’s minimum interest fee); or
  • Doyen keeps 75% of the economic rights in the player during the new employment contract

Put Option

To add to all this, Sporting further grants Doyen a put option (an agreement to sell an asset at a fixed price on or before a specific date), by which Doyen is entitled to sell the 75% it owns in the player´s economic rights to Sporting for an amount equal to 3,708,000 Euros. This option can be exercised in case Sporting has not transferred the player on or before 1 July 2015.

Furthermore, in order to secure the payment by the club of that amount to Doyen, Sporting shall grant a pledge, in favor of Doyen, over the club’s tickets for the 2015-2016 season and the following seasons if necessary to cover a debt in the referred amount.

After acquiring 100% of the economic rights due to the exercise of the put option, during any of the next two transfer windows after such acquisition, if Sporting transfers the player to a club or sells the relevant economic right to another fund or investor, Doyen has the right to 75% of the transfer fee paid to Sporting, deducting from the amount to be paid from the club to Doyen the put option fee mentioned above (i.e., 3,708,000 Euros).

Finally, Sporting still has the option, in case the player’s ability to play football decreases substantially above thereby affecting his market value, to request the recovery of 75% of the economic rights of the player, if:

  • Sporting notifies Doyen of its exercise of this right not before 1 September 2014;
  • Sporting pays Doyen an amount equal to 3,708,000 Euros; and
  • If Sporting exercises the right after 1 July 2015, an interest rate of 10% per annum will apply to the amount mentioned in the previous point.

If those requirements are not met, Sporting cannot exercise the recovery right. However, if in fact Sporting exercises the recovery right, Doyen will have two additional rights:

  • A right of first refusal to acquire the same economic rights on the same conditions offered to third parties; or
  • If Sporting transfers the player to a club or sells rights in the future transfer value of the player to another fund or investor, the right to 75% of the transfer fee paid to Sporting, deducting from it the amount already paid by Sporting to Doyen (i.e., 3,708,000 Euros)

Doyen’s obligations

The main obligation of Doyen in the agreement is the payment of 3,000,000 Euros fee for the acquisition by Doyen of 75% of Rojo’s economic right.

It is also worth noting that, in this agreement, Doyen states it recognizes Sporting is an independent entity in so far as club’s employment and transfer-related matters are concerned and Doyen shall not, either through the agreement or otherwise, seek to exert influence over these matters or the club’s policies or the performance of its teams.


CAS decision

Given the observations made in this article, the question inevitably arises: doesn´t this agreement, to some extent, already influence Sporting’s transfer and employment matters?

According to CAS decision of last December, the answer is no. CAS decision found that the agreement between Sporting and Doyen is valid and therefore the court ordered Sporting pay compensation in the amount of 12,013,990.00 Euros (plus interest to Doyen).

In addition, Sporting must also pay Doyen 75% of the fee it would receive if Manchester United sells Rojo for more than 23 million euros.

Unfortunately, the full CAS decision is not publically available and so we cannot analyze their reasoning in depth. However, this is the first decision to favor third party investor and uphold the term of a valid contractual agreement. Could it be a silver lining for third party investors? Only the future will tell.


Doyen’s reaction

Doyen commented in a company statement that:

Having heard the arguments of both sides, CAS rejected every single claim presented by Sporting, completely vindicating the position of Doyen.

The company said the CAS decision “ratified” the “validity and integrity” of Doyen’s activities in football:

Every deal we do contractually ensures that clubs have control of their own transfer policy, and that players have the final say on where they want to play, especially as the player is not part of the contract. We don’t own anybody and that’s the major difference between TPO (Third Party Ownership) and the business model we defend: TPI (Third Party Investment).25

Doyen Sport chief executive Neilo Lucas said:

In a transparent and regulated environment TPI can be a safe, accessible tool for clubs to bring top talent, improving their competitiveness on the main stages of world football. We don’t want to live in a world where only rich clubs can win trophies.


It goes without saying that it would be very useful if the CAS arbitral award were made available to the general public so that we can analyze the discussion on the merits of this fascinating case. However, this would seem unlikely given that it would need to be agreed by both parties.

It has certainly split opinion. In the view of the Swiss law firm Lenz & Staehelin, the agreements are “drafted in an imbalanced manner26 that clearly favours Doyen as an investor in the economic rights of the players”.

But, despite the undoubtedly robust protections for Doyen, in truth, what investor/lender/bank would not protect their investment loan in the same way? Asking for additional collateral securities, like in this instance a pledge over the club’s tickets for the 2015-2016 season, would seem to be relative standard and prudent commercial practice.

The matter is unlikely to end here, as Sporting has appealed on 22 February 201627 to the Swiss Federal Tribunal, although it is limited to a number of grounds, such as lack of jurisdiction, violation of elementary procedural rules (e.g. violation of the right to a fair hearing) or incompatibility with public policy.


Other notable cases

Finally, in addition to the Doyen and Sporting case it is briefly worth summarizing a couple of other legal cases that are looking to challenge the TPO ban.

In February 2015 the Spanish and Portuguese football leagues (represented by the famous lawyer Jean-Louis Dupont) made a complaint28 to the European Commission claiming the ban:

violates the rules of competition set out by the Treaty on the Functioning of the European Union (TFEU), as well as the fundamental freedoms of establishment, services, labour and capital movements”.29

Their press release states:30

the decision to ban TPO restricts the economic freedoms of clubs, players and third parties without any justification or proportionality. This ban harms clubs, especially those with fewer sources of income, preventing them from sharing the economic rights of their professional players with third parties, and forces them to manage their financial obligations more prudently. This ban also harms dozens of players whose professional careers have been helped along by people, coaches and third party funds. Lastly, this ban completely prohibits third parties from managing footballers' rights, a practice that has been carried out legitimately in the vast majority of the world’s professional leagues up until now”.31

Both leagues alleges that:

this restriction on free competition infringes Article 101 of the Treaty on the Functioning of the European Union about the prohibition of anti-competitive agreements, and Article 102 of the TFUE with regards to FIFA abusing their dominant position, as well as violating other fundamental EU liberties”.

There is also the another claim presented by Doyen before the Brussels First Instance Court regarding the decision by the Belgian football federation to block the registration of player, Ferraz Pereira, in the FIFA TMS system. The case involved Belgium football club, RFC Seresien/Seraing United and the initial decision was based upon reasoning that the player was hired through a third party investment between Doyen and the club.

The pending judicial decisions of these claims will assess, in particular, whether FIFA’s TPO ban is or not compatible with EU law.


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Luís Villas-Boas Pires

Luís Villas-Boas Pires

Luís Villas-Boas Pires holds an Undergraduate Degree in Law from the Universidade Católica Portuguesa. Prior to his career in sports law, Luís worked for 11 years in both Lisbon and London as a M&A, Corporate and Capital Markets lawyer.

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