Inter signed half a footballer last Tuesday. That is not a comment on the player in question, but simply an honest representation of the facts. Mauro Icardi was acquired from Sampdoria under a co-ownership agreement, meaning that each club now holds 50% of his rights.
To those unfamiliar with Italian transfer dealings, the concept might seem a little baffling. How can two teams share a footballer? Icardi cannot exactly play for Inter and Sampdoria at the same time.
In practice, Italian co-ownership deals operate in much the same way as a loan. The buying team (Inter, in this instance) will acquire the player for one season, using him as they see fit and paying his wages for the duration. At the end of the year, the agreement must either be extended for another 12 months or resolved with one team buying out the other’s share.
If an agreement cannot be reached between the teams, the deal will be resolved via silent auction in a process known as ‘going to the envelopes’ (‘andare alle buste’). Each team submits a written bid for the remaining half of the player and whoever comes in highest, wins. The losing team is obliged to accept their rivals’ offer.
(In a rather quaint twist, these silent auctions are all resolved over the course of two days at the end of each June in a single Milan hotel. Team executives hand their bids over to representatives of the Italian Football Federation, who act as independent arbiters.)
This process has led to some highly unlikely outcomes. Most famous is the story of Paolo Rossi, who moved from Juventus to Lanerossi Vicenza on a co-ownership deal back in 1976. The striker scored 45 goals over the next two years, helping his new team to promotion from Serie B, and then a remarkable second-place finish in Serie A.
Unable to resolve their co-ownership, the two clubs went to the envelopes. Vicenza’s owner, Giuseppe Farina, became so anxious that he wound up going round the dressing room asking his players how much they thought he should pay. The suggested figures averaged out to about 1bn Italian lira (equivalent to $1.15m at the time), but on the eve of the auction, Farina received an anonymous phone call, advising him that Juventus would bid more than twice that amount.
Unwilling to lose such a valuable player, Farina duly scribbled down an offer of 2.6bn lira. Given that the two teams were only supposed to be bidding for half of the player’s rights, he was effectively suggesting that Rossi’s true value was 5.2bn lira. Or to put it another way: nearly three times the then world transfer record.
Farina was in for a shock. His mystery caller had been lying, and Juventus bid just 875m lira. Vicenza retained Rossi, but at a preposterous cost. The Italian Football Federation’s president Franco Carrara resigned in protest at such financial irresponsibility.
It is one thing to make a miscalculation, though, and quite another to fill your bid out incorrectly. That is precisely what happened to Bologna two years ago, when they lost their goalkeeper, Emiliano Viviano, over an administrative error.
To submit a bid in these silent auctions, team officials fill out a standard-issue form supplied by the Italian Football Federation. There is a box in which they must write down their bid, and another in which to state their overall valuation of the player—i.e. the bid figure multiplied by two.
Bologna’s then general manager, Stefano Pedrelli, mistakenly wrote his bid for Viviano down in the latter section. Inverting the process, he then halved that number as he went backwards through the form, bidding €2.35m when he had intended to offer €4.7m. Viviano’s co-owners, Inter, won the player for €4.1m instead.
Inter can rest easy knowing that there will be no auction for Icardi next year. Written into their deal with Sampdoria is a clause obliging the Nerazzurri to buy the remaining 50% of the player for a pre-determined fee at the end of this season. Inter will pay approximately €6m for the first half of Icardi, and a similar sum to complete their purchase in 12 months’ time.
Why would Inter opt for such a peculiar structure to a deal if they know that they are ultimately going to buy the player anyway? The Italian journalist Gianluca Di Marzio, a man well-informed on all things transfer-related, cited ambiguous “bureaucratic motives”.
He may have been referring to rules which limit how far a team can spread out its payments. Inter are reported to be splitting that initial €6m into three separate instalments, and will presumably take a similar approach with the remainder next year. Inter recorded losses of more than €70m on their most recent accounts and are finally beginning to recognise the need to monitor their cash flow.
The Nerazzurri already used a similar model to acquire Samir Handanovic in two stages from Udinese. They are not the only ones to see the benefits to such an arrangement; Juventus signed both Mauricio Isla and Kwadwo Asamoah on co-ownership last year. Both players will be back next season, the Bianconeri buying the rest of Asamoah this summer, while extending their deal for Isla by another 12 months.
Still more common, however, are those co-ownership arrangements in which a young player moves from a big team to a smaller one in order to gain experience. Many coaches and players prefer these arrangements over loans, because they give everybody a stake in the player’s development.
A team taking a player on loan has no incentive to help him improve unless it will help them to win right away. With a player bought on co-ownership, the scenario is different. Coaches and managers know that there is a chance the player could stay. Even if he does not, it is still in their interests to help him get better so they can charge a higher price when they eventually come to sell.
Sebastian Giovinco’s recent history provides a compelling recent example. Although the forward initially joined Parma on loan from Juventus in 2010, there was an option written into that deal allowing the Crociati to take co-ownership for €3m. They duly exercised that right at the end of the campaign, and he went on to score 15 league goals in 2011-12.
Parma sold their half back to Juventus last summer for €11m, netting a handsome profit. In return the Bianconeri had effectively bought two years of development for Giovinco as a full-time starter, an opportunity that he would never have got in Turin. Some fans might question now whether it was really worth their while, but such skepticism is coloured by hindsight.
On top of all those considerations listed so far, there is the straightforward concept of spreading risk. If a €10m player bought on co-ownership for €5m fails to live up to expectations, then the buying team can offload their share without doing irreparable damage to their finances. If the player is a success, then paying an inflated price for the remaining 50% will at least feel like less of a gamble.
Even for those who are familiar with the structure of such deals, the endless cycle of co-ownership trading can get a little dizzying. The experience of following a summer transfer window in Italy was best summed up by the character Commander Borlotti, president of the fictional club Longobarda, in the cult-classic mid-80s Italian comedy L’allenatore nel Pallone (The Manager in the football).
“I’ve managed to land three quarters of Gentile and seven-eighths of Collovati, plus half of Mike Bongiorno,” exclaims Borlotti in one characteristically frenetic outburst. “In conclusion, we’ve obtained co-ownership of Maradona in exchange for Falchetti and Mengoni.”
In the real world, these deals are almost never as complicated as they appear. In Italy, co-ownership can only ever mean holding a 50-50 share, so there are no eighths of players being passed from one club to another. Instead there is a straightforward mechanism which allows two teams to share in an individual’s rise or fall. Just like any other kind of transfer, some do it better than others.