Quality Sports Investments

Quality Sports Investments is a chain of companies dedicated to football investments. Through Quality Football Ireland, the company held the footballer's contract rights. QSI also invited investors to buy their financial products: the economic rights in packs.

It was reported that Jorge Mendes and Peter Kenyon were the advisors to the fund.[1] However Kenyon quit Creative Artists Agency in October 2011.[2] It was also rumoured that FIFA was investigating the fund as third parties ownership actually not allowed and a possible conflict of interests of the agent Mendes and CAA.

Creative Artists Agency, the manager of the investment fund, had set up Quality Sports Investments LP (one) to Quality Sports V Investments LP (five), as well as Quality Sports Investments Fund Limited, Quality Sports Investments Fund GP Limited, Quality Sports Jersey GP Limited (one to five) in Jersey. In Ireland, there was three companies, namely Quality Football Ireland Limited, Quality Football Ireland III Limited and Quality Football IV Ireland Limited.

Quality Football Ireland Limited

Quality Football Ireland Limited (abb. QFIL) is a Republic of Ireland incorporated company.

As of 31 December 2011, QFIL was 70% owned by CAA Sports International LLC (CAA), CAA director O'Connor and Michael Levine (co-head of CAA Sports) held 15% each. QFIL borrowed money from Quality Sports Investments LP as asset-backed security and later Quality Sports II Investments LP (QSI II) to purchase the economic rights of the transfer fee receivables of the footballers (coined ERPA: Economic Rights Participation Agreement), made the company an intermediate holding company with €100 net equity (the original share capital), or a shell company. The companies were associated with Quality Sports Jersey GP Limited (QSI GP) and Quality Sports II Jersey GP Limited (QSI II GP). QSI GP and QSI II GP were 50% owned by CAA.

Unlike Portuguese football investment funds, the EPRAs was not treated as an intangible asset, and so there is no amortization nor write-down as a case of tangible asset. Investor were at risk of losing all value if the player transferred as a free agent. In Portuguese funds, the asset is already amortized to zero when the player's contract expires. However in the Irish fund, the asset is still worth the same account value on the day before the player is released from his contract.

The company at first bought 5 players from 2 clubs in 2010, for €7.25 million, which later revealed by Sporting and Beşiktaş's fiancicial filing, and documents leaked by Football Leaks.

In 2011, the fund was restructured, the old player's asset were treated as one asset valued €7.25 million (contributed to QSI I) and new loan from QSI II were treated as another, for €12.9 million. It was later revealed that it consist of the 50% economic rights of Elias for a €3.85 million,[3] 40% economic rights of Saúl Ñíguez for €1.5 million (according to Football Leaks)[4] and €7.75 million for other players.

Elias was bought on 15 September 2011. Sporting bought 100% rights from Atlético Madrid for €8.85 million 2 weeks ago,[5] making the transaction to QSI uneconomical as the price was less than half of the purchase value. However, as FIFA set up a monitoring system for the flow of the transfer fees, ensuring that the transfer fee must to paid between clubs, the transaction may involved third parties ownership. Atlético Madrid may "buy" the rights from a third party owner, sell "100% rights" to Sporting, and as part of the deal Sporting had to then on-sell the rights entitled to the third parties. After the deal, Sporting effectively bought Elias 50% rights for €5 million. Elias already fully owned by the third parties and the player himself before leaving Brazil, and Corinthians only owned the rights to receive 20% of the player's additional value.[6]

On 3 August 2011, Beşiktaş announced that the club was negotiating with QFIL for selling Necip Uysal, Atınç Nukan and Muhammed Demirci.[7] On 27 August, Beşiktaş exposed the players involved in the negotiation was Hugo Almeida,[8] which the club was trying to buy him back, and the three Turkish players were the bargaining-chip. In October and November Beşiktaş announced that there is no progress but the negotiation did not involve Ricardo Quaresma nor Mustafa Pektemek, as both players were 100% owned by the Turkish club.[9][10]

Date Players Clubs Percentage Price Departed Team Departed Date Price Footnotes
2010 Torsiglieri, MarcoMarco Torsiglieri
50% €1.7M Metalist Ukraine 2012 €1.7M + 10% interests P.A. (€34,000)[12] Quality Sports Investments LP[13]
2010 Almeida, HugoHugo Almeida
50% €2M
2010 Dier, EricEric Dier Sporting Portugal 50% €1M[15] Sporting Portugal 2012 €1M[16]
2010 Figueiredo, TobiasTobias Figueiredo Sporting Portugal 50% €1M[4]
2010 A player Sporting Portugal €1.55M
2011 Elias, Elias Sporting
50% €3.85M Quality Sports II Investments LP[12]
2011 Ñíguez, SaúlSaúl Ñíguez Atlético Madrid Spain 40% €1.5M[4]
2011 Players €7.75M
2012 Chaby, FilipeFilipe Chaby Sporting Portugal 50% €1M Quality Sports Investments LP[12]

Burnaby Investments Ireland Limited

On 15 September 2011, Sporting sold 50% of Ricky van Wolfswinkel to the third fund for €2,537,500,[17] half of the price Sporting purchased (€5.075 million); however Sporting actually announced the fee was €5.4 million in June 2011.[18]

S.C. Braga revealed in its financial report that the signing of Juan Carlos for €2.5 million was financed by the fund, in which the fund acquired 90% contract rights for €2.5 million.[19] Braga de facto allowed the fund to register the player as a "player" of Braga, as the non-dividable registration rights of a player must be held by a football club. Moreover, FIFA had set up a subsidiary, "FIFA Transfer Matching System gmbh", to track all the international transfers, which made the transfer fee impossible to pay to the fund directly; Braga was the entity to receive the transfer fee then re-distributed to the fund. In exchange, Braga received 10% future transfer fee. Juan Carlos subsequently left for Real Zaragoza.

The Burnaby fund earned an estimate reveune of €5 million after Sporting sold Wolfswinkel in March 2013.

In October 2012, it renamed to Burnaby Investments Ireland Limited (company number 498686)[20] from Quality Football Ireland III Limited. In its 2011 audit report, the company disclosed that it signed four assets from two clubs with a total purchase of €9,787,500, with a €3,100,000 asset was bought back on 31 August 2011 for €2,895,000. If the information from Sporting and Braga aforementioned were true, the third fund acquired a fraction of the players right for €3.1 million probably from Sporting, 50% van Wolfswinkel for €2,537,500, a player probably from Sporting for €1,650,000, and Juan Carlos from Braga for €2.5 million.

The Irish fund is financed by Quality Sports III Investments LP and Quality Sports III Jersey GP Limited, which both entity were renamed to Burnaby Investments LP and Burnaby GP Limited respectively in November 2012.

In 2014 The Guardian reported that Chelsea F.C. was linked to Burnaby Investments LP, as shown in its annual report from 2011–12 to 2013–14.[21]

Quality Football Ireland IV Limited

Shown in the 2011 audit report, Quality Football Fund Ireland Limited had acquired the economics rights of five players from two clubs on 20 October 2011 for about €10 million, as well as a lump sum option of €10 million to another club to purchase. (later revealed one of the player (and club) was Eduardo Salvio of Atlético Madrid[4]) On 11 November 2011, the fund acquired one additional player from one additional club for €318,750. Among the footballers, only Tobias Figueiredo was specifically mentioned by Sporting that the 50% economic rights was sold to the fourth fund.[22][16]

The fund later renamed to Quality Football Ireland IV Limited.[23]

In February 2012, the fund acquired three more player's economic rights for a total of €3,000,000 from two clubs,[24] matching the announcement of Sporting for João Mário (20%) and Cristian Ponde (25%).[22][16] Thus, the fund had a player asset totaling €13.3 million as of February 2012 financed by Quality Sports IV Investments LP of Jersey Island.

A leaked document also shown Atlético Madrid sold 30% economic rights of Koke to the fourth fund in January 2013, for €3 million, as part of the deal to cancel a €5 million debt of the club to the fund related to Eduardo Salvio for €5 million on 31 July 2012.

Other Sporting deals

The club also sold Fabian Rinaudo (50%, around €1.72 million[25]) and Diego Rubio (40%, around €1.2 million[25]) at the start of 2011-12 season.[16] Sporting also sold Stijn Schaars (37.5%) to the funds. However, not specifying which fund.[16]

V Fund

Quality Sports V Investments LP (reg.no: 1492) and Quality Sports V Jersey GP Limited (reg.no: 110693) were established in mid-2012 (May and June), however the entity that held the contract rights which incorporated in low tax countries such as Ireland were still unknown.

See also

References

  1. ↑ "Transfer dynamics could be on the brink of change". The Guardian. 11 August 2011. Retrieved 28 February 2012.
  2. ↑ "Peter Kenyon quit Creative Artists Agency due to strategic differences". The Guardian. 11 October 2011. Retrieved 28 February 2012.
  3. ↑ "Comunicado" [Communication] (PDF). Sporting CP (in Portuguese). CMVM. 15 September 2011. Retrieved 28 February 2012.
  4. 1 2 3 4 https://footballleaks2015.wordpress.com/
  5. ↑ "Comunicado" [Communication] (PDF). Sporting CP (in Portuguese). CMVM. 30 August 2011. Retrieved 28 February 2012.
  6. ↑ "Situação contratual dos jogadores profissionais" (PDF) (in Portuguese). SC Corinthians Paulista. ca. June 2008. Retrieved 28 August 2011. Check date values in: |date= (help)
  7. ↑ "Quality Football Ireland Lımıted ile görüşmelere başlanmıştır.". Beşiktaş (in Turkish). Turkish Public Disclosure System (KAP). 3 August 2011. Retrieved 28 February 2012.
  8. ↑ "Almeida'nın fondaki ekonomik haklarının devralınması ile ilgili görüşmelere başlanmıştır". Beşiktaş (in Turkish). Turkish Public Disclosure System (KAP). 27 August 2011. Retrieved 28 February 2012.
  9. ↑ "Quality Football Ireland Limited ile görüşmelere istinaden herhangi bir gelişme olmamıştır.". Beşiktaş (in Turkish). Turkish Public Disclosure System (KAP). 10 October 2011. Retrieved 28 February 2012.
  10. ↑ "Quality Football Ireland Limited ile görüşmelere istinaden herhangi bir gelişme olmamıştır.". Beşiktaş (in Turkish). Turkish Public Disclosure System (KAP). 3 November 2011. Retrieved 28 February 2012.
  11. ↑ "PROSPECTO DE OFERTA PÚBLICA DE SUBSCRIÇÃO E DE ADMISSÃO À NEGOCIAÇÃO" (PDF) (in Portuguese). Sporting CP. 10 December 2010. Retrieved 28 February 2012.
  12. 1 2 3 Quality Football Ireland Limited 2011 Annual Report, PDF purchased from Irish Companies Registration Office
  13. ↑ Quality Football Ireland Limited 2010 Annual Report, PDF purchased from Irish Companies Registration Office
  14. ↑ In 2011–12 audit report: Diğer Ticari Borçlar hesap bakiyesi olan 21.844.989 TL’nin 17.286.189 TL'si faktoring şirketlerine olan borçlardan, kalan bakiye 2.000.000 EURO (4.558.800 TL) ise futbolcu Almeida transferi ile ilgili olarak fon şirketi QUALITY FOOTBALL IRELAND'e olan borçtan oluşmaktadır.
  15. ↑ "Relatório e Contas do Exercício 2010/2011" (PDF) (in Portuguese). Sporting CP. 9 September 2011. Retrieved 12 December 2012.
  16. 1 2 3 4 5 "Relatório e Contas do Exercício 2011/2012" (PDF) (in Portuguese). Sporting CP. 7 September 2012. Retrieved 8 May 2016.
  17. ↑ "Comunicado" [Communication] (PDF). Sporting CP (in Portuguese). CMVM. 15 September 2011. Retrieved 28 February 2012.
  18. ↑ "Comunicado" [Communication] (PDF). Sporting CP (in Portuguese). CMVM. 3 June 2011. Retrieved 28 February 2012.
  19. ↑ http://www.scbraga.pt/sc-braga/relatorio-e-contas-1/relatorio-e-contas-da-sad-2010-2011
  20. ↑ http://www.cro.ie/GetAttachment.aspx?id=ea2a5a3f-7116-4b83-a416-b4dde55d9340
  21. ↑ "Questions for Chelsea over links to third-party ownership of players". the Guardian. 31 January 2014. Retrieved 3 May 2016.
  22. 1 2 "Relatório e Contas do 1º Semestre de 2011/12" (PDF) (in Portuguese). Sporting CP. 29 February 2012. Retrieved 12 December 2012.
  23. ↑ http://www.cro.ie/GetAttachment.aspx?id=9075e03f-3673-4497-809c-26bc3736e4dc
  24. ↑ Quality Football Ireland IV Limited 2011 Annual Report
  25. 1 2 Based on the price sold to Sporting Portugal Fund
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