Media Sports Investments

Media Sports Investments (MSI) is a London-based international investment fund^[1] that until June 2006 was headed by the Iranian-born, British-educated, businessman Kia Joorabchian. It has attracted considerable attention for its ownership between 2004 and 2007 of Corinthians football club in Brazil, and for its involvement in the 'third-party' ownership of players, notably the Argentinian forward Carlos Tévez.

The source of the money behind MSI was a subject of considerable speculation. Roman Abramovich, owner of Chelsea, was at one time rumored to own a 15% share in the group, while Joorabchian was persistently linked to the oligarch Boris Berezovsky and his associate Badri Patarkatsishvili.^[2][3] MSI itself declared that it had "a number of investors mainly based in Britain and Russia".^[4]

MSI and Corinthians

MSI was founded in 2004 by Joorabchian and Nojan Bedroud to purchase Corinthians. The agreed 10-year deal stated that MSI would invest $35 million into the club –$20 million of which would cover debts– in return for 51% of profits over the duration of the contract.^[5] In the wake of MSI's involvement a stream of new players arrived at the club, players who were engaged to play for Corinthians but whose economic rights were partly or wholly owned by the investment fund. By 2006 MSI was listing as its investments not just Corinthians itself but also the players Carlos Tévez, Marcelo Mattos, Gustavo Nery, Roger, Javier Mascherano, Carlos Alberto, Sebastián Domínguez and Marinho.^[6] The signing of Tévez from Boca Juniors for $22 million in December 2004 was a record for a transfer by a South American club.^[5]

The deal to take over Corinthians had been the subject of investigation by the Brazilian police, although no wrongdoing was found.^[7] In July 2007, however, a Brazilian judge issued arrest warrants for Boris Berezovsky, Joorabchian, Bedroud and four officials of club, including the chairman, Alberto Dualib, on charges of money laundering.^[8]

The federal attorneys Silvio Luis Martins de Oliveira and Rodrigo de Grandis were reported by the Brazilian legal website consultor Juridico as saying that MSI's transactions were "carried out with the use of numerous offshore accounts which have the single and well-known intention of distancing the investor and the illicit origin of the resources from their final destination, in this case the purchase and sale of players".^[9]

In July 2007, in the light of the money laundering allegations, Corinthians broke off their association with MSI.^[10] Despite winning the league in 2005, there had already been a public breakdown in relations between Corinthians and MSI. The club had seven different coaches in 18 months, including Daniel Passarella, Márcio Bittencourt and Antônio Lopes, and had struggled for form. Joorabchian's involvement with team affairs had come in for criticism and both Tévez and Javier Mascherano had been moved to West Ham United in the English Premier League.^[11][12] In December 2007 Corinthians was relegated to the Brazilian Championship's second division.^[13]

The warrant for Joorabchian's arrest was suspended by the Brazilian authorities in August 2008.^[7]

MSI and West Ham

In 2005 MSI was involved in negotiations to take over the English club West Ham United. The plan was abandoned in November of that year when agreement on a valuation of the club could not be reached.^[14]

On August 31, 2006, the Corinthians players Javier Mascherano and Carlos Tévez moved to West Ham United. The following day the club announced the opening of "exploratory discussions" over a possible takeover, reportedly by a consortium fronted by Joorabchian and Paul Yeubrey. West Ham in the end accepted a rival bid from investors headed by Eggert Magnússon.

The transfers of Tévez and Mascherano proved highly controversial. In April 2007 West Ham were fined £5.5 million for failing to reveal the full terms of the ownership of the players.^[15] In fact MSI retained a percentage of the economic rights to Tévez, shared with a second company, Just Sports Inc, while Mascherano was owned by Global Soccer Agencies and Mystere Services Ltd.^[16][17][18] All four companies were represented by Joorabchian who had officially stepped down as president of Media Sports Investments in June 2006.^[19]

Claim against West Ham United

In a compensation claim against West Ham, undertaken in March 2008, Joorabchian claimed that following the Premier League ruling in April 2007 he had brokered a deal between West Ham and Tévez's third-party owners. MSI and Just Sports Inc had initially been reluctant to terminate their ownership arrangement as requested by the Premier League. Joorabchian said that under the terms of the deal West Ham had agreed to pay £4.7 million — later reduced to £4.5 million — to cover costs, the player’s salary, expenses and a loan fee —thereby suggesting that Tévez was paid a salary and expenses beyond that being covered by the club.^[20]

Joorabchian further stated that he paid West Ham £2 million to release Tévez’s registration so that he could join Manchester United in August 2007 on the understanding that West Ham would return the money with legal costs amounting to £2.6 million.^[20] That transfer had itself been subject to a protracted dispute while Joorabchian claimed that MSI and Just Sports Inc retained the economic rights to the player and should therefore receive any fee for the transfer, rather than West Ham as the Premier League insisted. In the end the West Ham received £2 million for the player's registration —the money Joorabchain claimed to have paid West Ham on the understanding that it would be returned.^[21][20]

Joorabchian's claim against West Ham was eventually settled out-of-court with Joorabchian engaged as a consultant by West Ham with fees of more than £2 million.^[22]

Manchester Transfers

In August 2007 Tévez joined Manchester United on a two-year deal in which his player's registration was leased by the club while his economic rights were retained by his third-party owners.^[23] Only when he signed for Manchester City in September 2009 was Tévez removed from the third-party ownership of MSI and Just Sports Inc. That deal was reported as being worth £47 million to the companies owning Tévez's economic rights, although that sum was disputed by Joorabchian.^[24][25]

In March 2009 West Ham agreed to pay Sheffield United £20 million over five years in settlement of the case that they had brought against West Ham when the east London club stayed in the Premier League at the end of the 2006-7 season at Sheffield United's expense while playing Tévez, a player they argued should have been ineligible.^[26]

Jô

In June 2008 the transfer of Brazilian player Jô from CSKA Moscow to Manchester City was initially blocked by the Premier League while they investigated his association with MSI and Joorabchian. Jô had played at Corinthians before moving to CSKA Moscow in 2006, signing for the Brazilian side while the club was under the control of MSI. Third-party ownership of players was banned by the Premier League in June 2008.^[27]

See also

• Third-party ownership in association football

References

1. ^ "Media Sports Investments website" Retrieved 2010-08-03.
2. ^ "Corinthians receive their own benefactor", The Guardian, 10 December 2004. Retrieved 2010-08-03
3. ^ Cobain, Ian, Kelso, Paul and Phillips, Tom. "The boys from Argentina -via Brazil and secretive offshore finance company", The Guardian 14 September 2006. Retrieved 2010-07-25.
4. ^ "Media Sports Investments website" Retrieved 2010-08-03.
5. ^ ^{a b} Bellos, Alex. "Is this man the new Abramovich or is he a front for the real thing?", The Guardian 10 December 2004. Retrieved 2010-08-03.
6. ^ "Media Sports Investments website 30 Nov 2006" Retrieved 2010-08-03.
7. ^ ^{a b} Dart, Tom and Szczepanik, Nick. "The transfer deals that continue to make the headlines", The Times 12 September 2009. Retrieved 2010-08-03.
8. ^ "Brazil orders Berezovsky arrest", BBC 13 July 2007. Retrieved 2010-07-25.
9. ^ Phillips, Tom and Scott, Matt. "Arrest order issued for Tevez's agent accused of money laundering", The Guardian 13 July 2007. Retrieved 2010-08-03.
10. ^ "Corinthians break off MSI partnership", ESPN 26 July 2007. Retrieved 2010-07-25.
11. ^ Kent, Joe. "Crisis at Corinthians", Sambafoot 10 August 2006. Retrieved 2010-07-26.
12. ^ Marcotti, Gabriele. “More questions than answers about MSI”, The Times, 2 September 2006. Retrieved 2010-07-27.
13. ^ Homewood, Brian. "Soccer-Corinthians relegated in Brazil two years after title", Reuters 2 December 2007. Retrieved 2010-07-25.
14. ^ "West Ham takeover plan scrapped", BBC, 24 November 2005. Retrieved 2010-08-03.
15. ^ “West Ham handed record £5.5m fine", BBC 27 April 2007. Retrieved 2010-07-25
16. ^ Conn, David. "Kia Joorabchian should now tell us where the Carlos Tevez £25m is going", The Guardian 14 July 2009. Retrieved 2010-07-26
17. ^ Conn, David. "Hammers face a pounding over third-party player agreements", The Guardian, 21 March 2007. Retrieved 2010-07-28.
18. ^ Bilal, Ahmed. "Original Tevez and Mascherano contracts with West Ham", Soccerlens.com, 8 June 2007. Retrieved 2010-07-28.
19. ^ "West Ham sign Tevez & Mascherano", BBC 31 August 2006. Retrieved 2010-07-25
20. ^ ^{a b c} Jacob, Gary. " Kia Joorabchian puts West Ham in dock over Carlos Tevez deal", The Times 5 March 2008. Retrieved 2010-07-26
21. ^ “Tevez cleared to sign for Man Utd", BBC 3 August 2007. Retrieved 2010-07-26
22. ^ Mullock, Simon. "Exclusive: West Ham paying controversial agent Kia Joorabchian £2million a year to act as transfer consultant" Daily Mirror 29 August 2008. Retrieved 2010-07-26
23. ^ Kelso, Paul. "The mysterious case of who owns Carlos Tevez", Daily Telegraph 15 May 2009. Retrieved 2010-07-26
24. ^ Ducker, James. £47 million: the bill for Carlos Tevez to cross the Manchester divide", The Times 12 September 2009. Retrieved 2010-07-26
25. ^ "Manchester City did not pay £47 million for Carlos Tevez, says Kia Joorabchian", The Daily Telegraph 12 September 2009. Retrieved 2010-07-26
26. ^ Burt, Jason. “West Ham to pay £20m over five years to settle Tevez saga", The Independent 17 March 2009. Retrieved 2010-07-26
27. ^ Wilson, Steve. "Man City hit ownership problems in bid for Jo", The Daily Telegraph, 18 June 2008. Retrieved 2010-08-07.

External links

• Media Sports Investments Official Site