Media Sport Investment

Media Sport Investment Limited was formed in London in 2004 by Kia Joorabchian and Nojan Bedroud. Its principal football project was a ten-year partnership with Corinthians in Brazil. MSI agreed to invest about US$35 million, with part of the money allocated to the club's debts, and to receive 51 percent of profits generated during the agreement. The arrangement effectively gave the investment group a significant role in the club's football operations. The partnership was built around an investment model that combined club financing with player recruitment. Corinthians signed several players whose economic rights were held partly or wholly by MSI or by associated companies. The best-known acquisition was Carlos Tevez from Boca Juniors in December 2004. The transfer, reported at roughly US$22 million, was one of the largest ever completed by a South American club at that time. Tevez helped Corinthians win the Brazilian championship in 2005. Other players connected with the arrangement included Carlos Alberto, Sebastián Domínguez, Nilmar, Javier Mascherano and Marcelo Mattos, while Brazilian media also linked several additional players to the network. The investment structure attracted attention because ownership of player economic rights was distributed among investment funds, agents and offshore companies. This form of third-party ownership allowed outside investors to participate in the financial upside of transfers while clubs retained the players' registrations. Although such arrangements were used in international football at the time, they created regulatory and governance concerns, particularly when the identities of beneficial owners and the terms of contracts were difficult to establish. The Corinthians partnership became increasingly unstable. The club experienced frequent coaching changes and poor sporting results after the 2005 title. Joorabchian's influence over football decisions was criticized, and the departures of Tevez and Mascherano to West Ham United further exposed the relationship between the club and the investment network. In July 2007, Corinthians terminated its association with MSI after Brazilian authorities issued arrest warrants in a money-laundering investigation involving transactions connected with the club, player acquisitions and offshore entities. The warrant against Joorabchian was suspended in 2008. In 2014, the entire group of defendants was acquitted, with the judge finding no evidence of an offense or criminal purpose. MSI's activities in England were closely related to its player-rights investments. The group was involved in unsuccessful negotiations to acquire West Ham United in 2005. Tevez and Mascherano subsequently joined West Ham in 2006, and the Premier League later fined the club £5.5 million for failing to disclose the full ownership arrangements. Joorabchian pursued compensation from West Ham over the financial consequences of the dispute; the claim was settled out of court, after which he worked as a consultant to the club. Tevez's later transfer to Manchester United in 2007 continued the debate over registration rights and third-party economic ownership. His economic rights remained with third-party companies until his move to Manchester City in 2009. In 2008, the Premier League also investigated the transfer of Jô to Manchester City because of his prior connection with MSI-backed Corinthians. The league prohibited third-party ownership of players in June 2008, marking a major regulatory consequence of the type of structure with which MSI had become associated. The supplied sources do not establish whether MSI continued operating after these events.

• 2014

  Defendants are acquitted in Brazil

  [1]Media Sport Investmenten.wikipedia.org

  A Brazilian judge acquits all defendants in the MSI-related case for lack of proof of an offense or criminal intent.

• 2008

  Premier League prohibits third-party ownership

  [1]Media Sport Investmenten.wikipedia.org

  The Premier League bans third-party ownership of players, a regulatory change closely related to controversies surrounding arrangements such as those involving MSI.

• 2007

  Corinthians terminates the MSI relationship

  [1]Media Sport Investmenten.wikipedia.org

  The Brazilian club ends its association with MSI amid money-laundering allegations and deteriorating relations.

• 2006

  Tevez and Mascherano join West Ham

  [1]Media Sport Investmenten.wikipedia.org

  Two Corinthians players connected with MSI-related ownership structures transfer to West Ham United.

• 2005

  Corinthians wins the Brazilian league

  [1]Media Sport Investmenten.wikipedia.org

  Corinthians wins the Brazilian championship during the MSI partnership, with Tevez playing a prominent role.

• 2005

  West Ham takeover negotiations are abandoned

  [1]Media Sport Investmenten.wikipedia.org

  MSI participates in negotiations to acquire West Ham United, but the discussions end after the parties fail to agree on valuation.

• 2004

  MSI is founded in London

  [1]Media Sport Investmenten.wikipedia.org

  Kia Joorabchian and Nojan Bedroud establish Media Sport Investment as a football-focused investment vehicle.

• 2004

  Corinthians partnership begins

  [1]Media Sport Investmenten.wikipedia.org

  MSI agrees to provide approximately US$35 million to Corinthians and receives contractual rights to 51 percent of profits over the proposed ten-year term.

• 2004

  Carlos Tevez signs for Corinthians

  [1]Media Sport Investmenten.wikipedia.org

  The MSI-backed club signs Carlos Tevez from Boca Juniors in a transfer reported at about US$22 million.

A private sports investment vehicle positioned around football club capital, player recruitment and the financing or ownership of player economic rights rather than consumer products.

• Football club investment · 2004

  Corinthians investment partnership

  MSI's principal institutional project was its proposed ten-year partnership with Corinthians. The fund committed approximately US$35 million, including money for club debts, and obtained an agreed share of profits. The arrangement also gave MSI influence over recruitment and helped finance a group of players whose economic rights were held through MSI or related companies.

• Sports investment · 2004

  Player economic-rights investments

  MSI and associated entities invested in the economic rights of footballers connected with Corinthians. The model enabled outside investors to participate in transfer-related value while clubs handled player registrations. Carlos Tevez was the most prominent example, while other players linked to the structure included Carlos Alberto, Sebastián Domínguez and Javier Mascherano.

• 2007

  Brazilian money-laundering investigation

  Brazilian authorities investigated MSI-related transactions involving Corinthians, player transfers and offshore entities. Arrest warrants were issued for Kia Joorabchian, Nojan Bedroud, Boris Berezovsky and Corinthians officials. The case ended with a complete acquittal in 2014, when the judge found no evidence of an offense or criminal intent.

  Source

• 2007

  West Ham third-party ownership controversy

  The transfers of Carlos Tevez and Javier Mascherano to West Ham exposed undisclosed or incompletely disclosed third-party ownership arrangements. The Premier League fined West Ham £5.5 million in April 2007. The dispute also contributed to broader restrictions on third-party ownership.

  Source

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• 2008

  Third-party ownership is prohibited in the Premier LeagueOther

  Background

  The transfers of players associated with MSI and other investment structures generated concerns about transparency, control and conflicts of interest.

  Action taken

  The Premier League prohibited third-party ownership of players.

  Aftermath

  The regulatory change curtailed the investment structure that had characterized several MSI-linked player transactions.

  Source

• 2007

  End the Corinthians partnershipStrategy

  Background

  Relations had weakened because of sporting instability, criticism of MSI's influence and a Brazilian investigation into related financial transactions.

  Action taken

  Corinthians broke off its association with MSI.

  Aftermath

  Corinthians was relegated to Brazil's second division in December 2007, while MSI's football investment model faced increasing regulatory and reputational pressure.

  Source

• 2005

  Explore a West Ham United acquisitionStrategy

  Background

  MSI sought to expand from football investment into direct club ownership in England.

  Action taken

  The fund participated in takeover negotiations for West Ham United.

  Aftermath

  The plan was abandoned after the parties failed to agree on the club's valuation.

  Source

• 2004

  Invest in and influence Corinthians football operationsStrategy

  Background

  MSI sought to combine direct club financing with control over recruitment and participation in future profits.

  Action taken

  It agreed to invest approximately US$35 million in Corinthians under a proposed ten-year arrangement in exchange for 51 percent of profits.

  Aftermath

  The partnership produced a Brazilian league title in 2005 but later deteriorated and was terminated in 2007.

  Planned investment and profit participation. US$35 million investment; 51 percent of profits (2004 proposed ten-year agreement)

  Source

1. 1Media Sport Investmenten.wikipedia.org