Gene Swinton, CEO of Sports D³ commentary instigated by today’s story in BBC News about Chelsea’s owner Roman Abramovich.
Among 100s of messages that I receive every week, there’s always at least one asking about how to view the Sports D³ platform in the context of the Third-Party Ownership (TPO) restrictions … and this means it’s time for a thread.
In instances such as the one reported today by BBC News: “FinCEN Files: Roman Abramovich had secret stakes in rival players”, the Third-Party Ownership (TPO) DOES cast a shadow of distrust and may affect the integrity of the game.
However, we at SD³ believe that drawing investors and their capital into the world of football is a good thing. We also wish for ALL clubs and ALL the investors to have equal and indiscriminate access to financing opportunities. The current reality provides an unfair advantage to the elite clubs and their billionaire-owners.
For this reason, we view TPO as an issue ONLY when the ownership of “economic rights” of a player is heavily concentrated in the hands of select few rich investors, who are able to exercise excessive control over the performance of an asset, undermines the integrity of the game.
We believe that preventing billions of sports fans & investors from direct participation in the sports economy (such as the Transfer Market) is not only unfair to 100s of non-elite football clubs & their fans but is also a violation of the European principle of “freedom of enterprise”.
Current distortions in the industry and unequal access to resources can not be solved through the “Central Planning” function of FIFA alone (the system of Solidarity Payments) similar to how the central planning function failed the Soviets in the last century.
Our mission at Sports D³ is quite the opposite: we strive to dismantle the existing asymmetry of power & abusive industry verticals. We empower smaller fan-investors to hold a direct economic interest in their favorite team or players WITHOUT exerting influence on their performance in the field. We facilitate crowd-formation of capital to provide clubs with new funding alternatives WITHOUT interfering in their sporting affairs.
The key reason why we chose DLT (blockchain) as underlying technology is to ensure (in the spirit of TPO) the widely-distributed nature of the ownership structure of an asset. Among other reasons, of course, were its decentralized tamper-proof nature, its transparency, and better consensus-based governance.
Page 16 of the FIFA manual on TPO, section “Regarding the compatibility of article 18bis with European Union Law” it reads:
“It also does not violate the freedom to provide services (in this case, financial or investment services for football clubs) within the European market, because such services can be freely provided so long as they do not lead to the investor or funder gaining unlawful influence on the football club in question.”
With a widely distributed ownership structure in place for each asset initiated on the SD³ platform and no majority shareholder influence, the SD³ platform follows the original noble intentions of the TPO regulation. We achieve this by setting a maximum cap of TPO ownership of an asset in the range of 25-45% with no single investor holding stake greater than 5-10% at any given time.
The “Zero-influence” principle is further reinforced via the issuance of non-voting class shares or debt when structuring the offering to the investors.
Simply put, in terms of influence & control, the capital raised on the SD³ platform resembles more of a credit line from a traditional bank [than the scenario described in the above mentioned BBC article], where the only expectation from the bank as a creditor is to receive back loan principal amount + certain % interest as a profit. The influence on the sporting strategy of a club is neither intended nor it is possible.
Sports D³ delivers fairness, equal access to opportunities, and better governance that are so needed in the industry today for the ultimate benefit of the game we all love.
In fact, SD³ is the 1st platform to enable true democracy in the flow of capital in the sports industry and to uphold the European principle of “freedom of enterprise”…. all for the benefit of the smaller football clubs which are NOT owned by a billionaire.
SD³ = #SportsDemocracy!
#SportsDemocracy #FanInvestors #FIFA #UEFA #Sports #Football #soccer #SportsD3 #SD3 #digitalassets #tokenization #TPO #FootballBusiness #FootballLaw #FootballFinance
‘Sports D³’ (‘D-Cubed Ventures OÜ’) is the leader in sports democracy. SD³ is a regulatory-compliant digital marketplace for assets in the sports industry. Join with many other sports fans, pro athletes, and clubs by signing up at www.SportsD3.com
If you have questions or interest in this subject matter we will be happy to hear from you. Please send us a direct email to [email protected]