FC Porto – Kings Of The Profit Game

On Monday evening, shortly after the International fixture list was completed, Real Madrid announced the signing of Porto fullback Danilo for €31.5 million. It brought the Portuguese giant’s total sales’ to €600 million over the last decade and a bit; a quite staggering figure.

Extraordinary
Most impressively, though, they have continued to be successful despite selling their best assets every season. In fact, within that period, they have won 24 trophies including every major competition: the Primera Liga, the Champions League, the Europa League, the European Super Cup and the Intercontinental Cup (World Club Cup).

It is an extraordinary tale of one of European football’s lesser lights using innovative practices to remain challenging strongly both domestically and abroad. How have they managed the process, though, despite consistently losing their best players?

TPOs
Their use of third party ownership and their relationship with super-agent Jorge Mendes has been vital.

TPO’s have long been a grey area in football, becoming more and more popular over the last decade – particularly on the continent. English football fans will most notably remember the transfers of Carlos Tevez and Javier Mascherano to West Ham in 2006 through these intermediary organisations.

The majority of FC Porto’s squad are not actually owned by the club itself, though. In fact, in most cases, they might only own less than 50% so therefore when they transfer a player to another team, they might only receive a certain percentage of the fee mentioned.

In essence, it means the €600 million sales alluded to above does not translate into profit but it does lend an overall sense of just how well the operation runs.

Brazilian clubs, where 90% of players are known to be partially owned by these TPOs, use the Portuguese Primera Liga as a European developmental hub for some of their best players. The common language, culture, weather and style of football helps them integrate more easily.

The can perform at their optimally best levels, in the top European competitions therefore catching the eye of the super powers.

Turnover
This is where Jorge Mendes comes in. Arguably the most powerful agent in world football, Mendes controls a global network of players and managers that is scarcely believable including Cristiano Ronaldo, Falcao, Jose Mourinho, Angel Di Maria, Diego Costa, and David De Gea to name just a handful.

Should any of these players show star potential, Mendes gets to work on bagging his client a move to a top club and Porto and the TPO a handsome fee in return. After, or even before in most cases, another player will already be lined up ready to take their place and the process starts all over again. It is a relationship working in perfect unison.

Things will begin to get tricky shortly, though, and not just for Porto; for every club who uses the third party route. FIFA are in the process of issuing legislation that shuts down this funnelling of players. From May 1st of this year TPOs will be banned after a sustained two-year campaign by UEFA.

The ruling could see clubs like Porto and Atletico Madrid suffer greatly. Along with the new Financial Fair Play rules, football’s governing bodies continue to help aid super clubs like Real Madrid and Barcelona in their bid to remain untouched at the top table of world football. Any challenge from below is snuffed out time and time again with new rules and regulations.

Porto, with the help of Mendes, will find a new way, though. They have to.