The Truth About MSI and How West Ham Could Afford Tevez and Mascherano
September 1st, 2006 by Alan HylandsWe’ve looked at Kia Joorabchian and MSI on State of the Game long before West Ham United were ever muttered in the same breath as them but it was only with the London based sports marketing company’s involvement in West Ham’s “Deal of the Century” on transfer deadline day that they stepped out of the shadows in the UK and gave us all a glimpse of what the transfer market will be like in the future.
We’ve all wondered just how did the Carlos Tevez and Javier Mascherano transfer to West Ham come about and what were the real motives behind MSI allowing their players to move to a safe midtable Premiership club and not one of Europe’s big spending Champion’s League everpresents and after doing some further research we’ve found out their plan to completely revolutionize the way the football clubs and players’ registrations system is run in the coming years.
From what we’ve learned from a variety of close sources it seems like the immediate paranoia about a Chelsea stitch up isn’t quite correct. In the UK, we’ve have become used to thinking that Roman Abramovich is the only Russian billionaire spreading his wings (and roubles) around the world but that’s simply not the case. The two money men involved with MSI are Russian businessman Boris Berezovsky, who is currently exiled in Britain, and his friend and business partner, Georgian businessman Badri Patarkatsishvili.
These two are the real men of power behind MSI with Kia Joorabchian becoming the increasingly more public face as they begin to move more of their operations into the UK and Europe. MSI as a business believe that they have found a way to make a lot of money out of football without actually owning football clubs which they feel is a path to financial ruin at worst and limited returns at best. Their plan instead is to control the assets needed for top flight football and to make their high returns and profits on these.
They already own several stadiums and the surrounding land in South America but the main asset they are planning on cashing in on are players, starting with Carlos Tevez and Javier Mascherano. The deal taking them to West Ham is quite unlike any other deal in English football history and MSI hope it becomes a blueprit for their future business.
West Ham have paid a minimal fee (believed to be around ?5m each) for the use of the two players. Despite West Ham claiming that it is a permanent deal, it seems like this is more wordplay than a traditional permanent transfer as we know it. The players certainly aren’t loaned by any club to West Ham (Corinthians had “bought” them using the same deal i.e. a little money for a glorified loan of the players not from a club but from MSI and will receive only a nominal amount in compensation) but neither are they owned by West Ham United.
The players then play for West Ham for however long MSI decide to keep them there, all the time letting them acclimatise themselves to the English way of life and the Premiership and putting themselves in the shop window ready for a move from one of the bigger fish, in this case Chelsea, Manchester United or Arsenal. When a move to a bigger club does happen then MSI, as the owners of the players, pocket the transfer fee and West Ham receive nothing. The value to the club is in the extended “loan” of the players from MSI without having to pay the necessary transfer fee upfront which in this case could amount to more than ?50m for the two in today’s market.
It’s certainly revolutionary and if MSI are allowed to carry on in this way then there is nothing to stop other companies setting up, funded by very wealthy people, and doing the exact same thing. The transfer system will become under more pressure than at any time in history, including Bosman, and the traditional structure of players owned by clubs disappears.
Maybe this is taking it too far but there will be a great many clubs who see this “leased” player option as a far quicker and cheaper route to challenge the big clubs and will be more than happy to play the part of parking space for these players.
Having seen how MSI plan to carve up football and how they want to make their money without the ties of a football club I’m truly astounded at the ingenuity of it all. So simple but obviosuly so effective if all goes to plan. The only spanner in the works could come from FIFA although in this day and age of mega money I can’t see FIFA standing in the way of big business and it really doesn’t get much bigger than this. Will it lead to the end of football as we know it or will the clubs band together to see off this threat to their traditional way of running their business?
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September 1st, 2006 at 9:33 am
This website is a shambles. Your previous “article” about this transfer was far from the truth linking RA to MSI, now, after “claiming” to have researched MSI for years and years claim you know everything.
you said, and I quote, “MSI as a business believe that they have found a way to make a lot of money out of football without actually owning football clubs which they feel is a path to financial ruin at worst and limited returns at best”.
So with your obvious expertise please explain why MSI tried to takeover West Ham in the last off-season? Furthermore, understandably rumours, why are there rumours surfacing that they are buying out West Ham in the next week or two.
You go on to say that West Ham ahev purchased these players for 5million each. Being a West Ham fan I can safely say that Pards wouldn’t splash out 10 million for two players who may not be around in a years time.
And to make this article even worse, you say that when MSI sell the players to whichever team is next (most probably Chelsea, Man U etc.) you then claim that West Ham will receive nothing. The whole idea in these sort of leasing player deals is so every party is a winner. West Ham would receive at least their money back from any potential future transfers.
September 1st, 2006 at 9:39 am
at the moment its all just roumers and nothing can be confirmed. as a west ham fan im not too bothered and just cant wait to see these 2 world class players out on the pitch for how ever long it may be. we’ve paid next to nothing to get them there so why would it matter if we got next to nothing back for them.
Basically both players have quoted that they are happy to join west ham and looking forward to getting on the pitch and moving the club forward. all the players want is to play football so lets just let them get on with it.
What i ask is would this sort of talk happen if the same thing happened but they went to man u or chelsea instead? Personally i think the world is just jelous that a so called mid-table club like west ham can bring these sorts of players to the club. yes it might be a business deal and not generallt how its done but maybe it will be in the future and maybe the board at west ham are smart enough to get in on the act sooner rather than later and get the benefits before the rest of the world catches on.
C’mon u irons!
September 1st, 2006 at 9:42 am
Apparently MSI had to sell there rights to the players to west ham because it is illeagal to do this in europe…just what i have read in the daily mail.
September 1st, 2006 at 9:48 am
wow men i cant believe it there must be something fishy in the transfer market must be FA look through it.
September 1st, 2006 at 9:49 am
It makes no sense at all then Sam, West Ham can’t afford these players, they couldn’t afford 2.5m for Steed Malbranque and suddenly they can buy MSI out of these two who should cost around ?50m? I really can’t see it.
I don’t think the same issues would have been raised if it was Utd or Chelsea Scott but the fact that it is a smaller, mid table club like West Ham who have got them, seemingly for very very little, is going to raise questions and rightly so. I doubt many West Ham fans care all that much and why should you? Enjoy it while it lasts, however long that may be.
September 1st, 2006 at 9:57 am
Alan, West Ham could afford Malbranque but did not agree to his ?60k per week wages which he was not worth.
I think this deal is a win-win situation for WH. If the players leave at the end of the year but have earned the club extra gate reciepts through great cup runs and at least the UEFA cup again next year then it has been worthwhile.
September 1st, 2006 at 9:59 am
How come Man U or Chelsea weren’t offered the same deal as the Hammers? I heard they contacted West-Ham.
Could this MSI be thinking of re-bidding for West-Ham?
September 1st, 2006 at 10:07 am
It sure has shut those mouthy yids up who were bigging it up about “stealing Malbranque” from us as they are a bigger club. he he The spuds cant hold onto your stars either - Carrick used you lot as another stepping stone and you can have the injured fulham reject now we have secured players twice as good with a great bit of ingenious business. Spuds a big club?? Come on get real!
September 1st, 2006 at 10:12 am
West Ham couldn’t afford to pay ?2.5m for Malbranque? What utter nonsense. The club were well able to pay it, either the player decided that he preferred to move to Spurs which is entirely his right, or West Ham decided not to proceed because they had other, bigger fish to fry. As for all the conspiracy theories they don’t exactly match up with the known fact that this consortium have already made an attempt to purchase West Ham, this is in the public domain and every shareholder received a letter informing them of that interest. Sour grapes anyone?
September 1st, 2006 at 10:14 am
Sorry Steve, I phrased that badly, it was of course the whole package for Malbranque that was the sticking point as any transfer isn’t just about the transfer fee (see Spurs and Damien Duff for another example).
Man U or Chelsea weren’t offered the same deal as West Ham because they are the big fish MSI want to show their players off to for a year in order to entice them into paying big money to actually buy the players off MSI and give them a massive profit.
West Ham are providing a showroom of sorts for the players for the time they are at the club, all the time showing how good they are and how well they fit into the English game and England in general.
I really don’t see a downside either for West Ham. They haven’t shelled out a large transfer fee so have no worries about the players depreciating in value if they don’t settle and at the very worst they’ll sell loads of merchandise and play to full houses every game at Upton Park.
Win-win situation as Steve says.
Graeme, I’d love to get indignant at your rant about Spurs but sadly after yesterday’s transfer action I have nothing to say in reply.
September 1st, 2006 at 10:22 am
as a hammers fan this has been a great bit of business….all the other clubs are jealous and rightly so but all i keep hearing about is conspiracy and abramovich, what if this deal is legitimate and all these rumours and accusations are just aload of rubbish then alot of people will feel silly especially the person(s) who wrote the above article
September 1st, 2006 at 10:24 am
At least you have the Abramovich vs Berezovski spot on. Berezovski is wanted in Russia and Abramovich will not take any risks by working with him. Berezovski, even now after loosing lots of his business toi the Russian Government, is probably as rich, if not richer than Abramovich. The noise from the Arsenal supporters that Abramovich is involved, is to say the least Rubbish.
Can MSI change the market with 2 players. Lol, they had these players for years but they have not added anyone else. If we believe this article their business is not moving forward at all, it is actuallt stagnant. To change such a market would have them owning the rights tosome 50 players by now. Do not believe a word of it. However something is not very obvaious has happened. Your guess may be even better than mine.
September 1st, 2006 at 10:25 am
your all missing the point
1 - Kia (MSI) is a West Ham Fan,believes that West Ham should have the best players so why not.If we can keep them for a year then other good players will know that coming to a family club you recieve more respect than joining Chelsea etc - its not all about money.Who would do a job if you were not enjoying being there? - Ashley Cole,say no more.
September 1st, 2006 at 10:26 am
Alan,
yeah the rant came from all the jib the spuds were giving for 48 hrs. As the saying goes who laughs last laughs loudest. The deal is quite common place in the city and often referred to as asset switching”. This gives Kia the option still purchase the club outright with a muddier valuation conversation now or sell on at huge profits if the players succeed. Very succesful in the city but rare as not many commercial entities (i.e west ham) in this case take the risk of what de-stabilising affect it can have. In footy however this is less of a risk and I think clever of MSI. Either way we get them for a year at a time when we need some real quality to push on, or they buy us outright if they start to like the look of the business more
September 1st, 2006 at 10:27 am
Get your head out of the clouds Danny, it’s a great piece of business for a year for West Ham but this is not a traditional football transfer. West Ham did not BUY these players, they are merely leasing them from MSI. Enjoy it while it lasts but don’t think for a second that MSI have West Ham’s best interests solely at heart, they are doing this deal, as I said above, to put their players in the shop window with the intention of selling them for a lot of money to a big club next summer. End of story.
September 1st, 2006 at 10:30 am
That is only partly true Alan. “Asset Switching” which they had to do becuaew of the Corinthians tenure being impossible gives them a good time period to build value in the assets but also to decide if they want to takle control of the full assets i.e west ham. Boris has openly expressed a desire to play in the football market and neither you or I know if this will mean buying a club or not. This option ties him to the one he was interested in and allows him to make a de-risked decision
September 1st, 2006 at 10:36 am
One of the problems of the internet and blogging is that people with absolutely no concrete information about something shoot their mouths off like they are in a privileged position to enlighten us all.
Alan Hyland says: \”West Ham are providing a showroom of sorts for the players for the time they are at the club, all the time showing how good they are and how well they fit into the English game and England in general.\”
And how would you know? Or is this something you just believe, for whatever reason? (This coming from a guy who reckoned we couldn\’t afford 2.5m for Malbranque - shows how much you know pal)
At least Scott and Sam (first two comments) are either choosing to remain agnostic until some hard evidence is unearthed, or are doing their reading and digging up some interest FACTS that are in the public domain. Nice find from the Daily Mail Sam. Looking at UEFA rules on player ownership, this is true. So West Ham do actually own these players.
September 1st, 2006 at 10:39 am
This isn’t that new, Yossi Benayoun was signed on the same/similar basis.
September 1st, 2006 at 10:58 am
I believe this to be in fact a friendly takeover with the two players offered as part of the deal. A ‘bedding in ‘ period to January when the window opens again and MSI at the helm after Brown resigns with loaded pockets. There is too much coincidence to think otherwise; look at the history over the last season and a half with the initial offer from MSI, I think now that WHU have established themselves back in the Prem MSI have raised the stakes with Tevez and Mascherano being offered on Monday, less than a week to the end of the window, MSI want WHU its as plain as that! The future potential of the club is immense when you think of the Olympics in 2012 and a potentially new stadium in Stratford, dont forget the channel tunnel link as well, its only six years away! this is a far more attractive business proposition for a company than trying to get involved with a bigger club whose scope for expansion is more limited, in business speak, a mature investment rather than an opportunity investment. Brown has found that too much to resist.
September 1st, 2006 at 10:58 am
I?m waiting for Terry Brown to turn around and tell everyone to “shut up, I put up the 50 million quid to buy the outright and they have both signed 10 year permanent contracts”
I can dream can?t I!
Anyway, after all said and done, the likely scenario is that MSI will be buying West Ham. Alan Pardew is unlikely to upset the dressing room by bringing in two quality players who are only temporary, can you imagine the likes of Marlon, Bobby, Teddy, Cole, Ashton and especially Mullins being best pleased with this sort of temporary transfer, I can?t.
I?m sure there is more to it than meets the eye but I don?t think anyone has yet hit the nail on the head. We will see in the coming weeks.
September 1st, 2006 at 11:31 am
I’m with the Hammers comments. It’s just sour grapes. Kia is a Hammers fan and wants them to do well. And all this “your club isn’t as big as our club” nonsense, well how do clubs get big, splash out on top players. I believe West Ham had more money in reserve than we previously knew about and bided their time waiting for an opportunity.
Again there is no concrete proof to all this conspiracy theory hoo ha and I’ll eat my words if it turns out to be true . Until then bring it on Arsenal, Man Utd, Liverpool, Chelsea and at a stretch Tottenham cos the Premiership has a new contender in town, the East End has arrived!
September 1st, 2006 at 11:43 am
Not sure I follow the logic. These two players have just been in the biggest shop window of all, the World Cup, so can’t see their values increasing after a season playing for a middling Premiership club. Plus what does that prove to Barcelona, Real etc? Also there’s the risk that they might get injured. Surely if it was about making profit you’d take the ?50M now?
September 1st, 2006 at 11:50 am
i feel like they are poison to football and are using west ham to gain a stepfoot in the EPL. ALL THE CLUBS SHOULD STAND FIRM TO ERRADICATE THIS SCUM FROM FOOTBALL. its killing our tradition and football will become a closed game with only the bigger clubs able to buy success (a bit like chelski).
what i have read sounds like they treat players like meat and its going back to the slave trade. (i dont know if Tevez and M signed a deal for life with them and a gettout clause of 50 million?)
As a West Ham fan i feel we must keep to our Academy and make profit ourself.
feel free to enlighten me if you feel i have written anything wrong.
September 1st, 2006 at 12:29 pm
Some very interesting comments I think and I believe that it is true that we Maybe even MSI know the end game of this yet. I believe the safest bet is that this is toes in the water stuff from all concerned and what happens next depends on what happend over the next few months (maybe season). The valuation of West Ham at the moment is almost inpossible to gauge because of the potential as others have mentioned of the Olympics. It is highly unlikely that a bidder and Brown would agree on that valuation and indeed it could be anything from less relatively than at present to potentially equal to (at least) that of the big boys.
So this move could be one of many things but I agree simply a shop window makes little sense when you consider the risk of injury and relative failure in the premiership regards these guys value. Personally I think it has that plus to do with the close examination of the potential and addable value to the club prior to a possible new interest in taking a stake in it or complete take over. It is certainly true that if they just upped and left next year with nothing added the club would be in a very uncomfortable position probably an untenable one so I would suspect that Brown has decided that that is only a minority risk in this great scheme of things.
September 1st, 2006 at 12:44 pm
Do i sense some west ham fans feeling slightly agrieved about this “truth” being publish? In all honesty I think that West Ham have been taken to the cleaners with this deal, of course it could all be folly and the deal may be proper but that seems less likely now. With ?30m release clauses mooted to be in both players contracts it may seem good business but from what i’ve read, not just from here but also from the Brazilian press in how the deal has affected Corinthians, West Ham won’t see much of the cash.
Maybe next time they should stick to genuine players who dont have these parasites attached
September 1st, 2006 at 12:48 pm
It’s all speculation. No-one outside the ‘inner circle’ of those involved in the transfer actually KNOWS what the real deal is. Why shouldn’t these players WANT to come to West Ham? If the ‘big’ clubs are the be-all and end-all then why don’t everyone support them? Has it actually occurred to anyone that these two players really do WANT to play for West Ham?
Whatever the deal, it was a great bit of business by West Ham and they should be congratulated for the work done bringing World class players to UP.
I reckon it’s a new mentality at West Ham and that bringing in such players is a major step to raising the club’s profile internationally. This is the platform on which more world class players will be added and just as Chelsea did with bringing Ruud Gullitt to SB, West Ham have done so with Tevez and Maschereno.
Who do the pundits think they are questioning the Argentinians decision to go to UP? This will give hope to many other clubs that it is possible to break the cartel and monopoly of an inner-circle of European clubs that are trying to dominate football.
Personally I think that West Ham have taken not only a bold step, but knowing the board at West Ham, a secure one for the club too. I’m glad I’ve got home & away season tickets as this will be a great season for us and tickets will be like gold dust.
The deal will also profit West Ham immensly considering the shirt sponsorship expires at the end of this season and sponsors will be more willing to part with bigger notes if Tevez and Mascheleno are running around the pitch wearing their logo. I reckon the shirt sales will be pretty lucrative too, my guess is that Argentina shirts (their blue one is almost identical to the new Hammers away kit) will be stocked at the Hammers shops and fans will buy them and wear them.
Don’t underestimate the merchandising potential of these players, Real Madrid recouped their ?24m they paid for Beckham by merchandise sales in the far east alone. Footy is massive business in more ways than just player sales, tickets and TV.
So get used to it folks, West Ham are entering the hallowed ground of the ‘big clubs’ and they’re gonna have to move over and make room.
C’MON U IRONS !!!
September 1st, 2006 at 1:19 pm
There’s undeniably something fishy about the whole deal, not least because of West Ham’s refusal to divulge any details of the terms. But, as good as articles like this are at stimulating debate, they’re founded on little more than speculation. We’ll see - the truth will out eventually.
For me, it boils down to this. As a Newcastle fan, would I have been happy to have had Carlos Tevez and Javier Mascherano come to Tyneside, even if they might leave in the January transfer window and even if we weren’t going to make a killing on them (having paid below their market value in the first place)? The answer to that is a resounding “yes”. So - enjoy, Hammers fans. Meanwhile, we’ll have to make do with Antoine Sibierski…
September 1st, 2006 at 2:01 pm
Your forgetting that there were teams interested in these players anyway and who’s to say that Tevez and Mascherano will have such a good season at West Ham anyway. This would be a very chancey way to do business in my opinion, as well as the obvious “May not cut it in the Prem” scenario, there is also a chance that both players could pick up serious injuries, then where would MSI be ?.
People really should think before spouting out any old crap really!!!.
September 1st, 2006 at 2:27 pm
Let’s look at the main players…
Terry Brown:
An accountant, not a football man. Has staunchly kept to business models when all around are in uproar. Selling the “crown jewels” that played so direly as a team as to earn relegation, is a great example of this. The club was left with enough breathing space to rebuild the squad, get the right manager in and come back up. Has virtually sealed the new stadium deal to the point where no money is being spent in Upton Park. It’s the training facilities that are getting the makeovers.
I can’t see him suddenly making a poor financial decision that would leave the club with nothing to show after a year or so of these 2 players hanging around. It must be a bigger deal…
Alan Pardew:
A great club manager but more so a team coach. To let 2 foreign speaking megastars come into his tight nit group of young British players and then watch them walk away a year later having upset the apple cart would seem very improbable. West Ham exist on team spirit and endeavour.
But then, perhaps it was not his decision…
MSI:
Mysterious, well not really. A business like any other. They are well funded and use their muscle to prise open opportunities. So what are they up to…?
Shop window - Sell both players on in a years time:
Simple, but seems a little strange. Surely the best “shop window” is the Champions League. Their value appreciation is directly proportionate to the competitions they appear in and the TV audience that they reach. Might as well cash in on them now. Or are they more useful as bargaining chips?
Takeover - Opening gambit from Kia and colleagues:
I look at West Ham and see almost a brand new brand, ready to be taken forward. A London team with a talented young (future England?) manager, established back in the top flight, attractive long history and providing England with 1966 World Cup Heroes, New Olympic Stadium on the way, Transport links to Europe etc etc the list goes on and on.
My hunch is that the trail back to MSI never really went cold after the last round of negotiations last season. This good relationship that Kia has mentioned between him and Brown may have allowed a more clever solution to the takeover to be devised back then. One which we are now beginning to see and one that will come with a raft of contingencies in case those pesky governing bodies ever become involved.
I guess it’s watch this space. I’m a Hammers fan and watching Mascherano and Tevez run out in claret and blue will bring the same warm glow to me as watching Futre and Di Canio once did.
September 1st, 2006 at 5:49 pm
Kia Joorabchian is not a West Ham fan, he supports Arsenal. This has been well documented. MSI have allowed the players to come to West Ham for two purposes:-
1. It will give them an opportunity to effectively pay for the debt side of any consideration West Ham would seek as part of any takeover. They will still need to stump up the goodwill to the shareholders. This will enable them to stump up less cash for a takeover. Once a takeover is completed, I have no doubt that at some point MSI would want to realise the value of these two players (bought by MSI for ?30m), take the profit (realisable value less west ham’s ?24m debt), pocket that profit and leave west ham’s balance sheet healthy. This then puts them in full control of a West Ham side without debt. From thereon in, I would presume they believe they can make sufficient future profits from a developing side with regular european football and new tv monies.
2. Should the takeover fail, then I am sure the players will be moved on in order that they realise the full value of the players exactly as above except that West Ham will receive nothing but will have had the benefit of effectively ‘loaned’ players plus MSI have had an opportunity to enhance their players values by having them play in the shop window most likely to enhance their values.
MSI’s risk is that the players do not cut it in the premiership. West Ham’s risk seems minimal except for the obvious mistrust of new owners. We would have that same mistrust for any other new owners.
Should West Ham be purchased by MSI, they will undoubtedly have an ability to wash some of their monies through a legitimate UK enterprise using large amounts of monies that a football club permits them to do unlike many other businesses.
As a Hammers fan, I have no fears about all of this. No-one can just become a Chelsea now. It’s been done. All the other clubs can do is seek to compete. This would ultimately make for a more competitive premiership with the likely champions being less than a 2 horse race, rather a five/six horse race. Football has been becoming more and more high finance, this is just another step towards that and I for one will be glad that West Ham may not be left behind.
September 3rd, 2006 at 5:20 am
The way I see it is we (west ham) have 2 superb players at the club who are owned by MSI. MSI are a business and therefore are about making money. West Ham were the most suitable team for these 2 players as we will give them first team football, we are an attacking team (crown pleasing) and have a pretty big fan base. All of this will increase the players reputations and value. MSI can then sell them on to one of the ‘big clubs’ and make buckets of money.
Its also good for west ham though as we get these 2 world class players for a few seasons and hopefully more will be attracted to us. Plus as Tevez is the Argie hero at the mo it will certainly raise our profile over there.
The only thing im worried about is the talk of MSI taking us over, although we will have 100m to spend, I really dont want to be called a glory hunter like the chelsea fans. Would be nice for West ham to win something though…ha
September 3rd, 2006 at 5:18 pm
according to todays times, west ham are paying half of the players wages and have not paid a fee at all for them. The contracts stipulate that they remain at west ham for at least a year after which they can be sold to whoever MSI decied to seel them to, west hame will receive no fee for the sale. The times also claims that each player has a contract that says they must play if they are fit, this apparently was one of the reasone Portsnouth , who were also offered them, turned the deal down, as the contract was too restrictive. Obviously if they play well, then its no problem to start them every game, and it could be great for West Ham this season, however if they don’t work out, then west ham still have to play them, which wouldnt be so good. After the year is up, one assumes that if they have settled well in the premier league, they will be sold to another club for a huge amount of money, leaving west ham without them or any fee. If they fail then presumably they will be taken off elsewhere to try again. It could be a great thing for west ham, it could also be a disaster