About the lack of free-market policies in the football (soccer) industry and the resulting economic distortions.

Commentary by Gene Swinton, ‘Sports D³’ Founder & CEO on the video published by FIFA’s Emilio Silvero on the subject of Third-Party Ownership (TPO) regulation.

Source: https://youtu.be/xXZGB__wr6M

This turned out to be a more elaborate version of Nick’s article in ‘Football Legal’ last year, which I found to be the best piece on TPO so far not just from legal prospective, but commercial too. Thank you for sharing! Many important points were raised indeed, also glad to see the prospects of changes.

However, my main concern about the current status quo remains. The very last comment in the Q&A section about “socialism vs. capitalism” was the closest it got to my area of concern.

The role of regulator in any industry is to ensure purity and fairness of competition, … unless it is a natural monopoly. What I find fundamentally wrong with TPO regulation in it’s current form is that FIFA, as a regulator, is mistakenly treating football industry (specifically flow of capital) as a natural monopoly. As a result FIFA’s manual ”central planning” approach to allocation/redistribution/flow of resources creates distortions (repeatedly) within various layers of the industry.

The solution to existing assymetries/distortions can be found within the economic theory’s Efficient Market Hypothesis (EMH), and to a smaller extent in the regulation of the industry. We do need ground rules, but excessive centralization/over-regulation will only create unneccessary burdens both for FIFA and the industry without yielding results.

In my opinion (shared by clubs across continents), EMH can be achieved in football/soccer industry by inviting the OPEN MARKET FORCES into the industry and specifically into the Transfer Market, i.e. adapt regulatory framework to invite BILLIONS OF FOOTBALL FANS to participate economically in this market side-by-side with billionaires and financial conglomerates (who we traditionally tend to focus on in conversations re TPO).

Democratic formation & flow of capital can deliver the purity of competition that we all wish to achieve and eliminate the existing distortions, all w/o violating the integrity of the game or creating external influence on internal policies.

The last person in the video to ask the question just barely touched on the tip of what can be done to DEMOCRATIZE the soccer industry. This subject matter is very complex – anyone interested feel free to message me directly to have a bigger conversation.

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