An Iranian, A Georgian, A Russian and An Israeli all try to buy a football club: The Tevez, Mascherano & Kia Joorbachian saga of 2006

 

The arrival of Carlos Tevez & Javier Mascherano at West Ham on the final day of the 2006 summer transfer window took the footballing world by shock. Considered to be two of the game’s most sought after talents at the time and linked to some of the game’s most reputable clubs, their arrival in East London drew both praise and cynicism from various sectors of the game. Some believed that West Ham had succeeded in a huge transfer coup, whilst others doubted how these two players ended up at West Ham instead of the likes of local rivals Arsenal & Chelsea. So, when Kia Joorbachian announced his intentions to purchase the club, it seemingly confirmed a cynical theory that the Iranian businessman & agent had placed his client, Tevez and his teammate in Mascherano at the club as a “sweetener” to ease his takeover at the club. This article focuses on how three months at West Ham United became shrouded in unwelcomed mystery regarding two Argentinian wonderkids, a takeover bid, fuelled by ego and avarice almost destroyed the fabric of the club and finally how truly globalised that the game had become, with buyers from all over Europe expressing an interest in buying the club during this period.

To understand how Tevez and Mascherano ended up at the club, we must go back to 2005 to gain a context into their arrival at the club and the events that were about to unfold over the next 3 months. Kia Joorbachian, an Iranian Businessman who represented both players as an agent for sports firm MSI (Media Sports Investments), had enquired about purchasing West Ham following their promotion back to the Premier League in 2005. Whilst rebuked by then chairman Terence Brown, who had spent the previous two years trying to reorganise the club from top to bottom following relegation in 2003, Joorbachian withdrew his enquiry and seemingly bided his time. Instead, the businessman focused on his south American project, Brazilian side Corinthians, who he had purchased in 2004 with licensed FIFA agent and fellow Iranian Nojan Bedroud, to make the club into the dominating force in south American football. Furthermore, Corinthians would also become a feeder club for big European sides, allowing these sides to acquire the club’s best players and generating a huge profit for Corinthians in the process. Whilst academics such as Paul Widdop have examined contemporary examples of a similar business structure, such as Wolverhampton Wanderers’ relationship with Portuguese “Super-agent” Jorge Mendes and his company GestiFute, who have moved lots of Portuguese talent to the club with the prospect of selling them to more affluent and reputable clubs, Joorbachian’s model succeeded instantly with a Brazilian league title in 2005. Buoyed by the signing of Tevez for a then South American continental record fee of an estimated $16 million US dollars and the signing of Mascherano, who joined halfway through the season and made a huge impact in his 10 games to help the team win a title, Joorbachian’s plan looked like it was working perfectly. Additionally, with West Ham enjoying a brilliant first season back in the top flight in the 2005/06 season, in addition to their 2006 FA cup final appearance and subsequent European football appearance on the horizon, Joorbachian saw this as the perfect time to relaunch his takeover bid and moved his two most valuable assets to the club in Tevez and Mascherano to the club to what some believed was his way to sweeten the deal with the club’s hierarchy.

Moreover, this is where Joorbachian’s takeover becomes interesting and worth examining in further detail. The reason Joorbachian could so easily move such prolific talents to a club of his choosing was because he essentially owned player rights’ through third party ownership, a practice common in South American football, but not in the English game. To put it into more simplistic terms, the third party, usually a company or agent, in this case Kia Joorbachian, owns some financial rights of a football player. In practice, this means that when as player is sold, the third party will receive a share of the transfer fees. In terms of Carlos Tevez for example, Joorbachian would earn 15% of any transfer fee in which Tevez was involved, whilst the player himself would earn 10%. Yet, in terms of Players’ rights, Joorbachian seemed to own 100% of Tevez’s player rights, 35% through the MSI company and 65% through a British Virgin Islands company called Just Sports Inc., to which he was listed was its director. Additionally, Mascherano’s player rights were also under third party ownership, but by the appropriately named Mystere Services and Global Soccer Agencies, with the latter having links to Israeli “super-agent” Pini Zahavi, who was already known to West Ham, due to his dealings in the transfers of Eyal Berkovic to the club from Southampton in 1997 and the sale of Rio Ferdinand to Leeds in 2000 and an assistive role in this double transfer due to his supposed links with GSA.

Furthermore, this is where things became convoluted. With West Ham’s form increasingly becoming worse as the takeover saga dragged on, the press began to explore how Joorbachian, a man with an estimated worth of £61 million at the time of the takeover, according to Brian Belton, could afford to support his boastful claim that he would invest large sums of money into the club, to match Roman Abramovich’s spending spree at rivals Chelsea since his £150 million takeover in 2003. Whilst Joorbachian had claimed in the press that his investors were from the Middle east and were substantially richer than Chelsea’s Russian owner, two names of Eastern European descent became the most common names linked to as the Iranian’s shadow investors in Russian Oligarch Boris Berezovsky and Georgian Businessman Arkady “Badri” Patarkatsishvili. Whilst both men made their money in oil during the post-soviet economic boom of the 1990s before being excommunicated by Russian Leader Vladimir Putin in the early 2000s, it also suggested that both were behind Joorbachain’s secretive MSI company, playing key roles in the financial and operational objectives of the business, although this was never verified. Both men were acquittances of Joorbachian through his time in the oil trade of the 1990s, the Iranian vehemently denied the involvement of either in his takeover bid for the club. Consequently, both Berezovsky and Patarkatsishvili would also deny their involvement, although the latter elaborated more in his statement, reportedly stating that he was not involved in any possible bid for West Ham at the time, but he was thinking about it and wouldn’t rule out a future investment if Joorbachian’s bid had been successful. Whilst these names would eventually disappear from the rumour mill, they were replaced by Israeli property developer Eli Papouchado, who had been introduced to Joorbachian via Pini Zahavi, considered by some to be the real power behind this takeover bid. Whilst not as affluent as Berezovsky and Patarkatsishvili as well as a complete lack of interest in football, according to a business associate who said he would have not been able to “tell West Ham from West Brom”, Papouchado saw the club purely as a lucrative investment option. This was primarily due to its prime location in a regenerating East London that was becoming a more attractive prospect to investors due to Canary Wharf’s continued success and the staging of the 2012 Olympic games in nearby Stratford. And yet, all Joorbachian had done was merely publicly state his intent to purchase West Ham. This did not stop the press going into overdrive regarding the implications that this takeover could have for the club.

Whilst purely conjecture, the first implication that the press believed Joorbachian’s takeover could have on West Ham was the structure of the club. Using the same model that he had used at Corinthians, Joorbachian’s idea was to exploit the club’s established reputation as a developer of young talent, bringing in fledging talent from South America and elsewhere to sell for maximum profit, essentially making West Ham a proxy nursery club to the footballing elite, all whilst keeping the club on the periphery of this elite to fully maximise the potential of a talent before selling. And if he had succeeded in his takeover, Joorbachian would have been at the forefront of this movement in club structure that is becoming more commonplace in contemporary European football. Whilst this idea of selling talent for profit had been commonplace in South America since the 1990s when more talent from the continent began moving to European leagues, it was still an alien concept in European football. It has only been in the past decade that clubs are transparently using models similar to what Joorbachian was proposing to implement at West Ham by buying young, inexpensive, homegrown or foreign talent with potential to sell at a later date for maximum profit when the player had reached his potential, or at least his potential with the club. Whilst Brentford are a British exponent of this system, yielding huge profits in recent years using an analytic approach to transfers, whilst remaining competitive in the top half of the championship, the most successful exponent of this system is German side RB Leipzig, the flagship team in a stable of football clubs owned by Red Bull, the energy drink company. Whilst both the European clubs that Red Bull owns in RB Leipzig and RB Salzburg both implement this structure within their clubs, Leipzig have become the flagship side of the Red Bull stable, mainly due to its run to the Semi-finals of the Champions league in the 2019-20 season and its ability to compete in the higher echelons of the Bundesliga, one of the world’s top leagues. However, whilst huge profits have been yielded on the likes of talents such as Timo Werner, who was sold for a £40 million pound profit in 2020, RB Leipzig have been the subject of much controversy surrounding the fact that they are indeed owned by a huge corporation in Red Bull and are, in the eyes of many football fans, corrupting the ethos of football for their own avarice.  And this is what many fans and those critics in the press feared would happen to West Ham. They feared that Joorbachian and his shadow investors would use West Ham and football in general for their own avarice, morally corrupting football through their exploitation of foreign talent through third-party ownership, and its simultaneous exploitation of West Ham’s identity as a reputable academy club, making it a nursery club to those with more money & repute to take their pick of talent. However, for all the promises that Joorbachian promised in his initial public declarations of owning West Ham, it seemed that as September 2006 carried on, both the Iranian and his investors began to lose interest in buying the club, seemingly put off by the board’s valuation of the club to be around £70 million. This was compounded by the fact that the board had become frustrated with Joorbachian who had still not made a formal offer, provided proof of funding or an acceptable business plan by early October. But this would not be the last that the club would hear of Joorbachian or his clients as the Tevez and Mascherano transfers would end up shaping the 2006/07 season in both good and bad ways.

 

In early 2007, rumours began swirling around about the legitimacy of the Tevez and Mascherano transfers, fuelled by the fact that the latter was unhappy about his lack of playing time at the club and was looking to move to play regularly. Having already played for two clubs that season in Corinthians and West Ham, Mascherano would have been ineligible to play for any other side that he signed for. With Liverpool wanting to buy the Argentine Midfielder, special compensation granted by FIFA on the 31^st of January 2007 and Mascherano was able to complete his move to Liverpool. Despite getting his move approved by FIFA, the premier league were more sceptical of the transfer, not allowing Liverpool to register the player in their squad, stating that it wanted to "take time to satisfy itself with the proposed arrangements". And whilst the premier league finally allowed Mascherano to complete his move and register for Liverpool on the 20^th of February, it was still not satisfied with the arrangements surrounding Mascherano’s and additionally, Tevez’s transfer to West Ham the previous September. So, on the 2^nd of March 2007, West Ham were formally charged with breaking two rules of the Premier League code in B13 and U18, in relation to the transfer.

Whilst B13 regarded the club’s conduct by not acting in good faith towards other clubs and the league, it had more importantly broken Rule U18 which regarded the issue of third-party ownership of players. Whilst the rule itself states "No club shall enter into a contract which enables any other party to that contract to acquire the ability materially to influence its policies or the performance of its team”, West Ham had circumnavigated this by entering a private agreement with the aforementioned parties of MSI, Global Soccer Agencies and Mystere Services and not declaring it to the Premier League, meaning it had broken rule B13 because this showed the obvious intent of the club to perform in bad faith.

So how did West Ham break rule U18 exactly? When signing Tevez and Mascherano, West Ham entered into a private agreement with the companies which owned their economic rights. The contract stated, among other things, that those companies had the right to terminate the players' contracts upon payment to West Ham of £2m in Tevez's case or £150,000 for Mascherano in any transfer window. And as the rule states that no other party par the club should be able to “acquire the ability materially to influence its policies or the performance of its team”, this was a flagrant disrespect for the rules by the club for concealing the third-party ownership of both players. However, whilst both players had been acquired somewhat illegally, there was nothing wrong with their registrations as players, which meant that Tevez could continue to play for West Ham and Mascherano was eligible for selection by Liverpool. And with Tevez finally finding form for West Ham as the season was coming to an end, this investigation was going to have a much heavier impact that it originally intended. With West Ham finding a huge upturn in form, winning 7 of its 9 remaining league games, Tevez’s contribution was fundamental to West Ham staving off relegation that season with 6 goals and 2 assists in these 9 games. And with the investigation into his transfer to the club still in progress, many of West Ham’s fellow relegation candidates believed that West Ham were unlawfully winning points since they were fielding a suspected ineligible player. With fellow strugglers Wigan Athletic and Sheffield United leading the charge, the teams around West Ham believed that the circumstances surrounding West Ham’s signing of Tevez should have been punished severely, primarily with a points deduction, which would have surely condemned West Ham to relegation. So, when the Premier league’s verdict was returned on the 27^th of April 2007, the teams around West Ham believed that the expected points deduction would settle any worries regarding their Premier league statuses.

However, despite the calls for a points deduction, the Premier league decided against it, much to the disgust of West Ham’s fellow relegation rivals. Instead, the Premier league decided to fine West Ham a record £5.5 million pounds, believing that a points deduction would be harsh as the club had pleaded guilty regarding the breaking of rule U18 and its subsequent termination of the agreement it had with the third party organisations that they had dealt with to sign Tevez and Mascherano. Furthermore, the Premier league believed that a points deduction for West Ham with three games of the season left to go would be incredibly disadvantageous to the club, especially with the huge fine that the club had been handed and that as a footballing body, all decisions should be fundamentally settled on a football pitch and not by a commission. Consequently, Dave Whelan, chairman of fellow relegation battlers Wigan Athletic was appalled, stating: "This is a very serious offence West Ham committed...They broke the law, told blatant lies and should have got a 10-point penalty. If we can sue West Ham or the Premier League, I am sure that will happen”. West Ham would beat Wigan 3-0 the following day, before winning their final two games of the season, including a crucial victory against newly crowned champions Manchester United in their final game of the season to ensure their survival and finish 15^th, 3 points clear of the relegation places.

Whilst the legal challenge of West Ham’s relegation rivals, including Wigan, petered out as these teams around West Ham also reaffirmed their premier league status, the legal challenge of Sheffield United, who were relegated on the final day of the season, did not. Determined that the contribution of Tevez, who had in their eyes been illegally acquired, had condemned them to relegation, they launched a legal challenge as soon as the season was over, firstly demanding reinstatement to the league in place of West Ham, before a failed legal battle against the Premier league to earn that reinstatement, led the club to begin negotiating a settlement figure that the press had calculated was anywhere between £20-50 million pounds. Whilst Sheffield United would eventually be found to be the wronged party and would settle for an out of court settlement with West Ham seeming to have paid a figure of £26.3 million pounds according to its accounts, it did still not stop West Ham from playing another season in the Premier league and rebuilding a side that had barely survived relegation, with its star in Tevez eventually leaving for Champions Manchester United. It seemed finally, that a transfer saga that had plagued the entire season, almost ruining the club in the process, was now over and West Ham could now try to move on with trying to rebuild a club without the illegitimate transfer dealings of the previous regime hanging over their heads.