In the first of a two-part series looking into alleged corruption in football, the Guardian talks to agents, lawyers and academics close to the biggest deals

UPDATE. September 2017: lawyers for Sam Allardyce have contacted us to say that he disputes the allegation that he gave advice on how to circumvent the FA’s rules on third party ownership.

A starlet at a Premier League club is to be promoted to the first team. His agent has represented him since the age of 16 and they enjoy a good relationship. Then, the manager informs a different registered intermediary (the official term) the player will be catapulted from earning a few hundred pounds a week into the £20,000-a-week bracket. What else is the intermediary, who does not represent the young hopeful, told?

Dan Chapman, a lawyer and intermediary at Full Contact, a sports law firm, takes up the story. “This manager says: ‘There will be a new contract on the table for him [the player]. It’s massive. That means his agent is going to pick up a nice fee. But what I want is to destabilise the relationship between player and agent. The big agent’s fee will go to you instead.’

“The proposed new agent, who’s never spoken to the player in his life, thinks: ‘How can I destabilise him?’”

Once it was discovered that two of the player’s family members were out of work, Chapman says that both were given expensive gifts and told “‘You need to persuade your boy to sign with this guy,’ not withstanding that’s in breach of contract. It ended up in a court dispute and a settlement.”

According to the various agents, lawyers, academics and other industry insiders the Guardian spoke with during this investigation, the episode Chapman relates is one of a countless number that contributes to their view football is “endemically corrupt”.

What also emerged was a concern more could be done by key stakeholders such as the Football Association, Premier League, English Football League, League Managers Association, and Professional Footballers’ Association. During the investigation it was repeatedly claimed all are reluctant to take responsibility for eradicating widespread bad practices despite having a duty of care to their respective members and this alleged inactivity potentially leading to millions of pounds in illicit payments.

When contacted, the various bodies denied this. The Premier League, EFL, PFA and FA said they take governance of the game particularly seriously. The Premier League referred to a joint statement, issued a fortnight ago with the EFL and FA, which said: “Any substantive allegations will be investigated with the full force of the rules at our disposal, which are wide‑ranging and well-developed.”

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The LMA told the Guardian: “Alongside the FA and other principal stakeholders we want to fully investigate any and all substantive allegations of corruption, quickly and comprehensively.”

The FA pointed to its integrity unit, which handles any accusation of wrongdoing and how full transparency and disclosure is offered where possible. The PFA chief executive, Gordon Taylor, said: “The PFA is committed to removing any form of corruption from the game and will support any positive efforts by the relevant stakeholders in this area.”

Chapman is certain the FA could do far more. Regarding the incidents such as one involving the starlet, he says: “Potentially there are civil matters there – breach of contract. And criminal. It also breaches FA regulations to make a payment to a third party to obtain a client.

“ Any agent could give many examples when this happens. It has happened at our agency. You go to the FA and report it. They’ll just say: ‘No hard evidence, it’s all circumstantial, we can’t do anything about it – sorry.’” Again, the FA denied this, saying it investigates any known incident where possible.

Andy Evans is a lawyer and founder of World in Motion, an agency that has represented players and clubs since 1997. His clients include the Manchester United defender Chris Smalling, and Chelsea. Evans is insistent the FA abdicated responsibility in April 2015 when Fifa devolved power over agents to individual associations.

“The FA refused to enter meaningful discussion with anybody on the agents’ side,” he says. “The FA was given a chance to regulate by Fifa. They had it all in their own hands: whatever systems, whatever regulations they wanted, to regulate the transfer system, the conduct of agents. And they chose to do the bare minimum and, significantly, to adopt a far less regulated system than the one previously in place.

“The FA opted to implement standard pro-forma documents and chose to absolve themselves of any real responsibility in the policing of the transfer system. They removed the entrance exam, which was a real barrier to entry with only 10% of candidates passing, and they opened it up to a £500 fee, basically saying: ‘Give us £500 and you can be a professional.’ You can’t imagine a similar system of licensing in the legal, accounting, financial services sector or any profession that values the role of the adviser.

“There is now this unsatisfactory situation, for example, where the FA does not review any contracts submitted between player and agent prior to lodging it – accepting it – as a contract. This offers no protection to the player from unscrupulous agents and allows multiple agency agreements to be in place at any one time.

“There was reportedly a deal in the summer transfer window where there were at least seven lodged contracts for one particular player alone. So the FA reportedly accepted seven representation contracts. Whose fault is this? Clearly the player. But how can that be any form of reliable, functioning system?”

The FA acknowledged multiple contracts may be lodged but stated this is the player’s responsibility. The governing body also pointed to its instigation of a maximum two-year contract with a representative as material evidence of a wish to safeguard a footballer’s welfare.

Dr Giambattista Rossi is the coauthor of Sports Agents and Labour Markets and a lecturer at Birkbeck, University of London. He believes European football’s governing body failed to show leadership in April 2015. “I blame Uefa. They should have stood up and said: ‘We are the best example of football in the world – in terms of governance, transparency, whatever – so let’s prepare a proposal to regulate agents at least at European level. And then, in China, Brazil, wherever, they [will] want to follow us because the main turnover of transfers is in Europe.’

Facebook Twitter Pinterest Carlos Tevez and Javier Mascherano were subject to third-party ownership when they signed for West Ham in 2006. Photograph: Shaun Curry/AFP/Getty Images

“There is something to regulate but everybody is wanting to stand back and doesn’t want to regulate. From the European perspective, football is a competitive industry - agents are considered as any recruitment company and these people are [usually] regulated. A very banal example: if you operate in the stock exchange market you need to be licensed: yes or no? Of course, because you are dealing with money, you require integrity, transparency, a certain level of trust.

“Since 2006 everybody is saying: ‘Look, the turnover is increasing’ and the fact it is not controlled is ridiculous. This has always happened because these are agreements everybody can do: simply a manager saying: ‘OK, I’ll buy that player, I will help you, you will give me under the table this amount of money.’ This has always existed. What is surprising is people are probably still shocked.”

Liz Ellen is the head of sport at the legal firm Mishcon de Reya, which advises a wide range of clubs. These have included Cardiff City when the transfers of the former manager Malky Mackay were investigated two years ago. The Football Association announced in July 2015 it would not charge Mackay with any offence.

Ellen believes there is a sense of entitlement in football. “If I bring in a new piece of work I would never expect any kind of kickback,” she says. “Too often in football it is seen as a natural consequence that when a deal happens someone should get something for it.”

Ellen believes a sea change is required. “There’s got to be an actual shift in approach. They don’t accept that what they’re doing is wrong. They don’t see the victim in it. People need to be scared of being caught. “I qualified as an agent before I started as a lawyer. I’ve never worked as an agent, I’ve always done it as a lawyer because I’ve found in the industry too inherently corrupt to allow people to act transparently.

“The industry is so twisted that for the many agents who want to do it right they’re pushed out of it in favour of agents who will do it the other way or they will lose players because the parents have been bunged something.

“We had a situation where one of the very top young talents was represented by an independent agent. He was a really good guy – he would send him autobiographies and DVDs of players he could learn from. On the cusp of a very substantial deal, his first as a professional, which this agent had negotiated by himself, a family member appeared from nowhere and convinced the player to go with a different agent. There can be no sense in that. And the money that’s paid to the family member comes from the club, which comes from the fan.”

She remembers Cardiff owner, Vincent Tan, said that when corruption is proved: “‘It’s the fans who are losing out.’ If someone is spending millions on players they shouldn’t be buying, that comes from fans.

“The governing bodies don’t particularly want to look into it because they know it’s a big can of worms.”

Ellen, like others the Guardian spoke to, is also concerned about duality. “It wouldn’t be allowed in any other industry. You don’t have an estate agent who acts for and is paid by both sides,” she says. “That again is a problem of regulation. It was banned for a short time then reintroduced. The reason? Because they thought if they don’t make it something allowed, people will do it anyway, under the table. That’s not the answer. If it’s something you shouldn’t do, you shouldn’t do it. Managers’ agents shouldn’t be representing players as well. There should be a strict distinction. I can give many examples of where the manager’s agent is representing half of the team as well.”

City of London police are reviewing the Daily Telegraph’s evidence of its claims regarding Sam Allardyce, Jimmy Floyd Hasselbaink, Eric Black, Tommy Wright and Harry Redknapp. This, as Taylor points out, is in conjunction with the FA as “the regulator of the game”.

Chapman believes the police should be more active. “Why on earth didn’t the FA investigate that illegal payments were flying around? They were aware that case was going to court,” he says of the starlet. “Why are people not being put in prison? Until someone is put behind bars I don’t think people will take it seriously because most disputes end up being resolved with financial settlements.”

Allardyce lost his job as the England manager for, in part, offering advice on how to bypass third-party ownership. TPO is banned yet the Guardian was told repeatedly that if facilitated correctly, it offers a career opportunity to a player that may not have been available. The practice is accepted as the norm in South America, while in Europe the Spanish and Portuguese football authorities were against its eradication, which occurred in May 2015.

Marcos Motta is a TPO expert who advised on Neymar’s move to Barcelona from Santos in 2013. He was also a lawyer for MSI, the company that brokered a deal with West Ham United in August 2006 to take Carlos Tevez and Javier Mascherano to the club. The lines remain blurred as Fifa allows an agent a lump sum of any future transfer fee but not a percentage as the latter is considered TPO.

Motta says: “TPO is part of the game so let’s regulate it. Why try to close the door to investors? The Sam Allardyce affair shows the system has failed – the ban has failed, it does not work. When there is vast money around you need proper regulation, transparency. When you try to ban a process people try to circumvent it.

“TPO is a kind of commercial and financial tool that has been used by South American clubs for a long time. We South Americans do not have this wide range of revenues that European clubs have. We have our assets – players. The very first time European clubs had the contact with the concept of TPO was the Tevez-Mascherano affair, which I was involved in because I was one of the lawyers of MSI in Brazil.

“The concept then spread throughout Europe by agents and clubs and investors. But there was nothing illegal – all these tools were used in Brazil under the strict commercial codes and rules of taxation.

“I had a chance to be part of the Fifa working group that ultimately banned TPO on a worldwide scale. This was during the Brazil World Cup in 2014. In the subsequent meetings in Switzerland the following November the working group was divided in terms of vision.

“On our side, which was not for banning TPO, I represented South America. There was also Daniel Lorenz, of Porto, a club that was very good in working TPO, and Javier Tebas, the president of La Liga. On the other side there were David Gill, representing Uefa, and FifPro. They based their claim on first, a kind of modern slavery which was also in a speech give by Mr Platini [former Uefa president].

“I am a sports lawyer since 1996 and have participated in deals like Ronaldo, Robinho, Roberto Carlos, Neymar, Fernandinho, the twins at Manchester United [Rafael and Fabio da Silva] – more than 300 deals. And more than once I saw these collapse simply because the player didn’t want to go. So ultimately players control their own career. So, modern slavery? I cannot agree with that. Secondly they were saying the money was not staying in the game. It’s not staying in the game if you have banning. Because if you have proper transparency and security on TPO for the investor and they experience spectacular returns of course they will reinvest.

“For me the issue is that players in South America were becoming costly. I experienced issues in Brazil in which European clubs came here and said: ‘We want to buy your starlet for X-million euros’ and the Brazilian club needing money, accepted.

“With TPO in place we have new guests at the table, which are the investors. So we have meetings where clubs say: ‘No, we don’t want to sell this player for this amount because this amount we already have from this investor. So we need more money.’ And this can double, triple the price.”

Motta’s opinion that there is confusion regarding TPO was reflected in a wider view of a lack of knowledge within the industry. Evans says: “I strongly believe there should be ongoing learning for agents as there is in the legal practice. For example, ask the vast majority of the new intermediaries what the new work permit regulations are and they wouldn’t have a clue. Ask a significant number the basic premises of contract law and they would not be able to answer.

“There is a need for a strong agents’ association that has commercial and trade specific codes of practice. Intermediaries in football have been allowed to walk through a gate for £500. The FA have allowed that to happen. It’s actually shameful: what other regulatory body would allow that?”

Ellen is clear what should be done. “Football tries to regulate itself. It’s not an industry that invites external scrutiny,” she says. “It’s the opposite: they try to do everything to make sure politicians don’t get involved or the police or whoever it may be. On the one hand they [the police] are generally shut out of the game, on the other is it a priority for them? Is it something they can easily follow?

“Often the people who know what’s going on are the people who are implicated. So anyone who has evidence is someone who has done something wrong so you struggle to pin down the hard evidence you need to go forward with it.

“If you take Cardiff as example – we managed to get a search order. That’s the only time so far [in football]. And that’s because you happened to have an owner who wanted to investigate alleged corruption.

“Now you’ll find there are a lot of clubs who know there is an issue and they don’t want to look into it, they don’t want to find out what’s gone on. In terms of actual scrutiny clubs should have much more visibility of what their staff are doing. If you were really going for it you’d say that all of your managers give full disclosure of bank accounts, their emails, phone records, everything – at the start and on an ongoing basis. Clubs wouldn’t dare ask for it and most managers wouldn’t give it. At the moment you’ve got that impasse where people don’t really want to get to the bottom of the problem.”