When Media Sports Investment (MSI) bought a controlling stake in Corinthians, a football club in Sao Paulo, Brazil in 2004, it set in train a series of events that continue to roll on to this day. This is despite it being four years since MSI terminated its association with the club. The on-off transfer saga surrounding Carlos Tevez is wrapped up in this controversial story, as are the rights to other players and the ownership of entire football clubs.
MSI is a London-based international investment fund which was founded by Kia Joorabchian and Nojan Bedroud specifically to purchase Corinthians. Sport Club Corinthians Paulista, the longest established of the four football clubs in Sao Paulo, was set up in 1910, named by Charles Miller the son of a Scottish father and Brazilian mother. Miller was sent to school in England and on his return to Brazil, brought with him the rules and equipment for the game of soccer.
The problems with MSI’s ownership of Corinthians began with queries as to the provenance of their funds. Roman Abramovich was thought to own a 15% stake in MSI and other Russian oligarchs, Boris Berezovsky and Badri Patarkatsishvili were also rumoured to be involved due to their links with Joorabchian. The connections between MSI, its main investors, and the football economy in both Brazil and England came to light as MSI bought into Corinthians and then tried to do the same with West Ham United.
It emerged in 2006 that MSI not only owned a controlling stake in Corinthians but also many of their leading players, including Tevez, Marcelo Mattos, Carlos Alberto and Javier Mascherano. This third-party ownership of footballers came to be ruled illegal by Fifa in 2007. By September 2009, the third-party deal for Tevez ended when MSI and Just Sports Inc sold the player’s registration for a sum thought to be almost £50m, although this figure is disputed by Joorabchian. MSI walked away from Corinthians in 2007, following a Brazilian court investigation into money-laundering charges against Joorabchian, Berezovsky, Bedroud and four club officials. A warrant for the arrest of Joorabchian was suspended by the Brazilian authorities in 2008.
The Tevez saga continued, with his transfer/lease to West Ham United leading to court action by Sheffield United who were relegated in 2007. West Ham ended up agreeing to pay the south Yorkshire club £20m over five years. This payment reflected the fact that West Ham essentially fielded ineligible players (Tevez and Mascherano) and should perhaps have been relegated instead of Sheffield United. Tevez moved on to Manchester United, then on to Manchester City and is thought likely to return to a club in South America soon.
The routes to profit from owning Brazilian football clubs and their players have expanded as a result of Traffic Sports Marketing’s activities in recent years. The surely ironically-named Traffic actually set up its own football club, Desportivo Brasil in order to develop successive crops of new footballing talent. Traffic also owns the rights to many players and seeks to make profit when players move on to bigger clubs.
Brazilian football has an enviable reputation for skill, flair and beauty. Off the field, though, it has been linked to amateurish commercial practices. The burgeoning Brazilian economy with its growing affluence and the strength of its currency, the Real, may be ushering in a new era of commercial success and player retention in South American football. The likes of MSI and Traffic hope to develop the football economy in Brazil, which is due for a significant boost in the years leading up to the next World Cup, due to be hosted there in 2014. But, as in booming football markets elsewhere, the murkier world of finance and money laundering, as well as questionable practices in player ownership and commercial exploitation, may also turn the beautiful game into something less appealing.