+ (BBG) World Soccer’s Financing Secrets Revealed in Document Leak

(BBG – click to see) Leaked documents from one of the biggest firms investing millions in soccer-player futures are providing a glimpse into a secretive — and now banned — financing practice for the global sport.

Invisible to even the most avid soccer fans, Doyen Sports Investments and other companies like it have become a critical source of financing for often cash-strapped soccer clubs. These investors pay teams for trading rights to select players, betting that the player’s trade value will rise. If that happens, Doyen realizes a profit when the player moves from one team to the next.

A spokesman for the company verified that the documents, released on Football_Leaks.com, were real, but declined to comment further.

Soccer’s Richest Trades

Accounts for the second half of 2011 reveal the company has been involved in some of soccer’s richest trades and turned a handsome profit. The company invested 25.6 million euros ($27.2 million) for trading rights for seven players, including some of the sport’s most expensive. Doyen spent 10 million euros for a 33.3 percent stake in Colombian striker Radamel Falcao’s trading rights. When he was traded two years later, the company netted a 4 million euro profit.

The documents also show that the firm paid 6 million euros in August 2012 to buy the global sponsorship rights of Barcelona and Brazil forward Neymar, one of soccer’s most celebrated players. It also loaned 6.9 million euros to two Spanish teams, Atletico Madrid and Sporting de Gijon.

FIFA, the governing body for world soccer, last year banned investors from buying stakes in future trading rights of players, the biggest part of Doyen’s business. The practice — called third-party ownership — started in South America and has spread to large parts of Europe, raising concerns about investors influence over the sport. Doyen has challenged the ban in court.

Ties to Malta

The documents also reveal the source of the company’s funding to be two entities that share an address with Doyen Sports in Ta’Xbiex, a little town in Malta.

One of the companies, Benington Group Assets Limited, has a single shareholder, Malik Ali, a Turkish citizen in his early 30s. Ali, who loaned more than 54 million euros to Doyen, according to one of the documents, also owns all of Doyen’s Class A shares. The remaining 20 percent of its stock is in Class B shares, owned by another Maltese entity called Wood, Gibbins & Partners Limited.

Doyen Sports is owned by Doyen Group Ltd., a London-based firm that invests in commodities, construction, the energy sector, and real estate. It also owns the five-star hotel chain, Rixos Hotels.

The leak comes at a sensitive time for Doyen. It’s awaiting the result of a lawsuit at the Court of Arbitration for Sport after Portugal’s Sporting Clube refused to pay the fund profits it was due over the trade of Argentine defender Marcos Rojo to Manchester United. Sporting claims the contract with Doyen is abusive.

The exact size of Doyen is unknown but Chief Executive Officer Nelio Lucas said in 2014that the company turns over considerable amounts cash, though it remains small compared with the parent company.

“The group is backed from private families,” he said. “It’s very clear we have so many investments in so many things. So many billions in turnover. So 100 million it’s a little drop in the ocean. Now 200 million, that’s two drops in the ocean.”