FC Barcelona found the traction difficult on and off the pitch over the last week.

In addition to a 4-0 deficit to Paris Saint-Germain in the first knockout stage of the Champions League, the Catalan giants face legal action regarding two of their most prominent superstars.

Neymar and Barcelona face trial in the Spanish legal system over corruption charges stemming from his transfer to Barcelona from Brazilian-side FC Santos. Meanwhile the club is appealing a domestic league suspension of striker Luis Suarez to the Court of Arbitration for Sport.

The first legal action stems from a complaint by a Brazilian group, DIS, that claimed ownership of forty percent of Neymar’s transfer rights.[1]

What is (was) third-party ownership (TPO)?

This ownership structure, also referred to as third-party investment, denotes an agreement where a third party provides a club or player with money in return for a percentage of a specific player’s future transfer fee.[2]   While the practice of TPO has been curbed in recent years by FIFA[3], Neymar’s situation occurred prior to FIFA’s ban and subsequent outlawing of the practice, which included other South American players such as Colombia’s Radamel Falcao, who had a 55 percent ownership stake purchased by an investment group prior to his move to FC Porto.[4]  Essentially what these third parties did was finance a portion of the transfer fee with the acknowledgement that once they transferred to a much larger club, they would get the same percentage of the larger transfer fee back.

What is the issue in Neymar’s situation?

DIS, the third-party group in this case, claims it did not receive the share of money it was entitled to when Neymar joined FC Barcelona from Santos for €57.1-million (~$60 million in U.S. currency) euro transfer fee in 2013. It claims the compensation given to DIS was smaller than what the contract stated.

The issue regards a payment of €40 million (~$42 million) that was paid to Neymar’s company, which was run by Neymar’s parents, by Barcelona and deemed to be salary.[5]

Spanish authorities estimate that the true amount of transfer fee is at least €83.3 million (~$88 million) .[6]  DIS contends Barcelona and Neymar colluded to bring him without opening the bidding to other clubs, which likely would increase his transfer fee value.[7]

Jail time unlikely for Brazilian superstar

If Neymar and FC Barcelona are found guilty, prosecutors seek a two-year prison sentence and an £8m fine (~$8.5 million) for Neymar.[8]  However, probation is the more likely route as Neymar is unlikely to serve jail time as a first-time offender under Spanish law.

This is not the first time FC Barcelona and a star player have run afoul of the Spanish legal system. Last July, Lionel Messi and his father were both sentenced to 21 months in prison for tax fraud, which they are currently appealing while serving probation.

Simply HDR[1].jpg


More legal action for Barcelona

FC Barcelona is the appellant in another case, this time involving the third member of its MSN line. The club is appealing striker Luis Suarez’s two-match ban to the Court of Arbitration for Sport after two failed domestic appeals.[9]

The ban, which occurred during the second leg of the semifinals against Atletico Madrid, would include the Copa del Rey (King’s Cup) final against Alaves in May.

The appeal is based on the argument that the player never struck the opposing player “in a reckless manner” as stated in the match official’s report, the club wrote in a statement on its website.[10]

To rule in FC Barcelona’s favor, what CAS will look for are factors demonstrating that the decision by the Spanish FA was arrived at arbitrarily or in bad faith.[11]  The arbitrator(s) may also look at the proportionality of the sanction compared to the incident.[12]

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[1] Neymar: Barcelona forward to stand trial on corruption charges, BBC.com (Feb. 20, 2017).

[2] At a glance: Third-party ownership of football players, European Parliament (January 2016).

[3] Regulations on the Status and Transfer of Players, FIFA.com, at 18bis (last visited Feb. 22, 2017).

[4] Chris Harty, Selling Your Soul: Radamel Falcao controlled by Third-Party Ownership, The Richest (June 1, 2014).

[5] Des Bieler, Neymar forced to stand trial on corruption charges, The Washington Post, (Feb. 20, 2017).

[6] DIS feel ‘betrayed’ after being shut out of Neymar transfer, AS.com (Feb. 4, 2017).

[7] Bieler, supra note 5.

[8] Neymar, supra note 1.

[9] Barcelona appeal Luis Suarez Copa del Rey dismissal to CAS, Eurosport (Feb. 17, 2017).

[10] FC Barcelona to appeal to CAS regarding Luis Suarez suspension, FC Barcelona (Feb. 17, 2017).

[11] FSA & Saarinen v. FIS, CAS 2010/A/2090.

[12] Olympiacos Sports Club v. LEN, CAS 2007/A/1384.