A Dubious Transfer Deal Gone Sour
Carlos Tévez was one of the first superstars signed by Manchester City's new owners from Abu Dhabi in 2009. The transfer fee was paid to a dubious company located in a tax haven. By DER SPIEGEL Staff
When Argentinian national team player Carlos Tévez transferred to Manchester City in July 2009, the club plastered the city with posters bearing the striker's face. Included was a somewhat spiteful greeting: "Welcome to Manchester." The message was primarily directed at Old Trafford and cross-town rival Manchester United. Tévez had played very successfully for the team for two years under legendary coach Sir Alex Ferguson and had been part of two Premier League championships and one Champions League triumph.
The acquisition of the prolific South American goal-scorer, who had been extremely popular at Manchester United, was a major statement for Manchester City, which had been purchased in 2008 by a holding company controlled by the Abu Dhabi ruling family. It was meant to show the world that the "Cityzens," who had for years stood in the shadow of their outsized local rival, was now a force to be reckoned with.
Money played no role for the club's super-rich new owner, and Tévez was lured away from Manchester United with what were, at the time, astronomical sums. This is revealed in documents the whistleblower platform Football Leaks has made available to DER SPIEGEL and which the German newsmagazine has reviewed together with its partners in the journalism network European Investigative Collaborations (EIC).
The documents also illuminate how Man City cooperated with a dubious company in order to sign the striker. Tévez's economic rights, after all, were not held by Manchester United, where the Argentinian had been playing on loan. In the summer of 2009, the economic rights to Tévez were actually owned by private investors, a case of so-called Third-Party Ownership (TPO). The football star belonged to an investment company that had been registered in a tax haven in the Caribbean.
Such company structures are akin to black holes for European tax investigators and the judicial authorities: They know they exist, but they don't know what's in them. That makes it close to impossible to regulate money flows to and from those offshore companies.
A 51.25 Million Transfer
The Football Leaks documents show that Manchester City, Carlos Tévez and the company Harlem Springs Corporate Inc., based in the British Virgin Islands, signed an 11-page contract on July 14, 2009. In that contract, Man City agreed to pay a total of 51.25 million euros for the striker's transfer -- not to Manchester United, but to Harlem Springs. At the time, it was the highest sum a Premier League club had ever paid for a player.
The money was due in four payments, with a first tranche of 15.5 million due five working days after the signing of the all the contracts necessary for the transfer. A second payment of 16 million was due on July 1, 2010. The third tranche, also for 16 million, was to be paid on July 1, 2011, and a fourth, of 3.75 million, to be paid two working days after a possible Man City triumph in the Champions League or Premier League championship.
At first, the London attorneys representing Harlem Springs were reluctant to reveal who the company was owned by. Later, though, they relented under the condition of absolute confidentiality. The Football Leaks documents lead to the conclusion that Harlem Springs' sole owner was British-Iranian businessman Kia Joorabchian. That information appears in the draft of a letter that Manchester City's then-CEO addressed to England's Football Association.
By that time, Joorabchian had already acquired a dubious reputation in English professional football. Tévez's first Premier League transfer had already caused quite a stir, with Joorabchian acting as the player's agent at the time, and not as the owner of his economic rights. In August 2006, right after the World Cup, Tévez transferred to West Ham United. Only a year later, it was confirmed that the player had only been lent to the London club and that his economic rights actually belonged to an offshore company based in the British Virgin Islands called Media Sports Investment (MSI).
That represented a violation of the disclosure requirements teams must fulfill during player transfers. The Football Association launched an investigation into West Ham that also shed light on Joorabchian's role as an agent in the transfer. In the end, the club was ordered to pay a fine of 5.5 million pounds, but Joorabchian was left unscathed. The owner of the company MSI remained a mystery.
That mystery wouldn't be solved until August 2011, when Britain's Guardian newspaper obtained access to sensitive court documents. Russian oligarch Boris Berezovsky had sued the widow of deceased Georgian billionaire Arkady "Badri" Patarkatsishvili before the London High Court, with Berezovsky claiming that he had owned the firm MSI on the British Virgin Islands together with Patarkatsishvili and that each held a 50-percent stake. In the trial, Berezovsky demanded his half of the money from the Tévez deal as well.
Was Tévez Controlled By Others?
The court documents indicate that MSI had sold the economic rights for the Argentinian to Harlem Springs Corporate for 24 million pounds in 2007, shortly before his transfer to Manchester United. The Football Leaks documents now show for the first time that the person behind this investment firm in the British Virgin Islands was likely Joorabchian. In other words, it appears that the player's agent had morphed into the owner of the player's economic rights. Was Carlos Tévez under the complete control of others?
Joorabchian declined to comment on the reporting by the Guardian and the purchase of Tévez's economic rights from MSI for the reported 24 million. He cited his contractual nondisclosure agreement and stated through a spokesman that Tévez had never been forced to transfer from one club to the next against his will.
If the Guardian is correct that Harlem Springs paid a purchase price of 24 million pounds to MSI in 2007, then Joorabchian made a gigantic profit of 23.4 million euros when he sold Tévez's economic rights to Manchester City for 51.25 million euros two years later. The perfect TPO deal. The icing on the cake, according to the Guardian's reporting, was apparently the 6 million pounds that Harlem Springs received from Manchester United as a loan fee for as long as Tévez played for the team.
When reached for comment by EIC regarding the 51.25-million-euro deal between Harlem Springs and Manchester City, Joorabchian refused to provide any information. A London-based attorney threatened to sue DER SPIEGEL in a British court if any of the stories reported contain "false statements of fact" or suggest that Joorabchian violated any legal or regulatory obligation of any sort in any jurisdiction. Manchester City likewise declined to comment on the material questions about the Tévez transfer. The club instead provided a general statement claiming EIC's reporting is an attempt to damage Man City's reputation.
Pot Sweeteners
It seems unlikely that Manchester City's owners now look back on the Carlos Tévez signing with fondness. His employment contract held the prospect of a golden future for the Argentinian, with Man City promising the South American a base salary of 50.3 million pounds, or roughly 60 million euros, for the five years until the summer of 2014. Per week, as the British are fond of calculating such things, that meant that Tévez was guaranteed an average of 228,000 euros.
And all sorts of bonuses came on top of that: a million euros for reaching the Champions League; a million more for being the top goal scorer in a Premier League season; two million euros for winning the Premier League championship. Furthermore, Man City promised the striker an impressive collection of "other payments," including "signing on fees" of 7.5 million pounds along with "loyalty payments" of another 7.5 million.
The club owners in Abu Dhabi had still another pot sweetener to convince Tévez to join them. It was item "F," under the heading "Higher Contract." The paragraph required the club to inform Tévez "immediately" should "any professional football player" employed by the club be promised a higher salary than his own. If that happened, Man City was required to increase Tévez's salary to match that higher number.
Yet despite all of the benefits cemented in his contract, Tévez's loyalty to Manchester City left quite a bit to be desired, as numerous documents in the Football Leaks trove indicate. As early as December 2010, Tévez signed a "strictly private and confidential" letter to Man City chairman Khaldoon Al Mubarak in which the Argentinian complained that the club's adherence to its promises was inadequate. He wrote that he was "not happy in the environment" and thought that "now is the right time for me to leave." An immediate transfer, of the kind Tévez was demanding, would be, he wrote, "better for both the club and for me." The most expensive player in the history of Manchester City closed the letter with the words: "Please be in no doubt that this is my choice alone."
Persona Non Grata
At this point in time, Kia Joorabchian had likewise apparently fallen into disfavor with club executives. At a Man City board meeting on Nov. 15, 2010, in Abu Dhabi, club boss Mubarak addressed the fact that Joorabchian had been seen at a Formula One race in the emirate the day before. Mubarak made clear, however, that "no invitation had been issued to Mr. Joorabchian."
For the club chairman, Joorabchian had become a persona non grata at Manchester City, as the meeting minutes make clear. He asked that Joorabchian be informed that he was to refrain from speaking to any player or anyone else with Manchester City. According to the minutes, Mubarak was clear about where his team stood on the issue: "No relationship exists between Mr. Joorabchian and Manchester City Football Club" he said, and neither the team nor its ownership "wishes to have any relationship with Mr. Joorabchian."
The club did not acquiesce to Tévez's insistence that he be transferred in January 2011. Then, not quite a year later, the relationship between the Argentinian player and his employer disintegrated completely when Tévez had a falling out with then-trainer Roberto Mancini. The situation came to a head after Tévez, who had been left on the bench for the start of a Champions League match in Munich's Allianz Arena, refused Mancini's instructions to get ready to be subbed in.
In the months that followed, the player essentially only communicated with the club via his London-based legal representatives. And in early November 2011, Tévez left Manchester without informing his club and flew to Buenos Aires. Club executives responded to the affront by threatening serious legal consequences for breach of contract -- repercussions that the club outlined in a two-page letter to Tévez.
But the unruly player remained in Argentina. The Football Leaks documents reveal that a British psychiatrist even traveled to Buenos Aires to meet with Tévez at the behest of the Man City team doctor. His assignment was to ascertain the state of the player's mental health. The doctor summarized his findings in an 11-page "psychiatric report." He concluded that Tévez "clearly would prefer to stay with his family in Argentina." On the other hand, the psychiatrist found "no clinical reason why he could not work in any other country."
A Short-Lived Cease-Fire
It took until February 2012 for the two sides to resolve their bitter dispute. The top-secret understanding between Man City and Tévez reads like a cease-fire in times of war. According to the deal, the player withdrew the appeal he had filed with the Premier League to the breach of contract complaint Manchester City had levied due to "gross misconduct for unauthorized absence." Six weeks of salary was at stake.
In a press statement that was part of the agreement and made public after it was signed, Tévez took the blame for the three-month standoff. "I wish to apologize sincerely and unreservedly to everybody I have let down and to whom my actions over the last few months have caused offense." In conclusion, he wrote that his focus was once again on playing football for Manchester City.
The peace held for not quite a year and a half, at which point Tévez was gone for good. His departure was sealed with the dissolution of his contract, which the striker signed on June 26, 2013, together with Man City's chief legal representative. Tévez was paid handsomely for this step as well, receiving a "termination payment" in two tranches, the first worth almost 1.3 million pounds and the second almost 3.1 million euros.
By that point, apparently, Man City just wanted to get rid of the striker, a state of affairs made clear in part by the transfer fee that Juventus Turin paid for him. Man City's owners in Abu Dhabi had paid a record fee of 51.25 million euros to a company in the British Virgin Islands for the striker, but they let him leave for Italy just four years later for just 9 million euros.
m.spiegel.de/international/world/carlos-tevez-in-manchester-a-dubious-transfer-deal-gone-sour-a-1238168.html
