Falcao to AS Monaco - The road to Real Madrid

[TheAmerican]

http://futbol.as.com/futbol/2013/05/11/primera/1368231056_452852.html

Translated text:

Radamel Falcao will go to Monaco as a bridge to Real Madrid
The coloumbian forward has included in a a release clause that if the Real Madrid club wants him in the future, the Real Madrid president will be made aware of such clause.
Falcao will play in Monaco in the season to come. Or at the least, until next January. He's reached an agreement with the French club, in virtue in which he can rescind his contract with Monaco if Real Madrid want to sign him (Florentino is aware of this contractual fact.) So that this way, the Tigre "Falcao" can utlize the Monegasque club as a bridge to his dream of playing in Madrid.
What raises attention is that such release clause can be carry through the next winter market. Or that the same of that... the half of the course of season. As such, it could be the case that he starts the season in Monaco and finishes in Madrid. Besides, taking into account that the french club will not particpiate in an European compeitica in the next season, the position in which they were newly promoted to the first division, could mean he could battle the Champions [League] with Real Madrid!
Although the operation has been closed in recent days, he was ready to forge in November of the year past, when Dimitry Rybolovlev, the multimillionare and owner of Monaco, and Falcao met up in Madrid through a mutual friend. From that moment, the columbian converted his primary objective to Monaco that will pay Atletico 55 million euros.
AS advanced their monegasque intrerest
The past saturday 20 of April, AS uncapped the interest of Monaco with Falcao. Dimitry Rybolovlev, owner of 66% of the main team, will prepare a big project with the objective of becoming the Champions. And for the season to come, they will sign the Tigre "Falcao" to their team.
Florentino flirted with the Tigre in the AS's Gala
In the 10th of december of 2012, Florentino and Falcao shared a table during the delivery of the AS Awards. During this, the president took advantage of the occasion to flirt with the Tigre "I will ask for a table napkin and I will pass it to Falcao" joked Florentino with Casillas reminded him of the formula with how he used to sign Zidane in 2001.​

This is being reported by multiple sources, and is to be confirmed tomorrow in the Spanish papers.

 

[EnfieldYiddo]

Where's the benefit lol

 

[Legacy]

As long as it's not Chelsea or Man City, I guess.

 

[branchie]

I'll believe it when I see it

 

[luptic]

Off to United. Remember where you heard that.

 

[faymantaray]

He's an idiot if this is true.

 

[crokey]

He's an idiot if this is true.

He has no say in where he goes, hes owned by an investment company.

 

[Gbspurs]

He has no say in where he goes, hes owned by an investment company.

And herein lies the sad truth. Similar to Tevez rocking up at West Ham I guess.

 

[faymantaray]

Sad situation indeed.

 

[TheGreenLily]

He has no say in where he goes, hes owned by an investment company.

This needs to banned in football immediately.

Hate this shite with a passion.

 

[crokey]

This needs to banned in football immediately.

Hate this shite with a passion.

Unfortunately when the majority of the world is so poor, it's the only way players can get out of places like Colombia.

 

[michaelden]

Unfortunately when the majority of the world is so poor, it's the only way players can get out of places like Colombia.

eh? What about being scouted... doesn't that happen there?

 

[nightgoat]

I thought Real were supposed to want him already?​

 

[michaelden]

I thought Real were supposed to want him already?

I'm beginning to think Real want everybody

 

[nightgoat]

Even David Bentley?

 

[michaelden]

we love in hope

 

[coysjod]

Unfortunately when the majority of the world is so poor, it's the only way players can get out of places like Colombia.

?

Get out of places like Colombia? Have you been? Would rather try to get out of places like Liverpool.

 

[King of Otters]

Let's hope so. Don't want him going to Chelsea. Imagine how good they'd be with him in their team.

 

[theShiznit]

Isn't this basically just a way of selling your best player to your biggest rivals without you (Atletico) looking bad?

 

[Shadydan]

This explains the Falcao situation a bit more in depth.

http://www.reddit.com/r/soccer/comments/1e8ncw/explaining_the_falcao_move_to_monaco/

You have probably all already seen that Falcao is destined for Monaco. There were a lot of rumors about a potential move to Manchester United, Chelsea, Real Madrid and others - so why does he end up moving to Monaco?
The answer is because of the complicated third-party ownership involved with Falcao. There was a very similar situation with Hulk when he moved to Zenit.
To explain this, we need to take a step back and first see how third party ownership works. Those in England would have previously seen this topic as it reached prominence when Carlos Tevez and Javier Mascherano signed for West Ham United. Here were two stars from Argentina signing for a club in London who were struggling to stay in the top flight. The controversy lead to West Ham paying compensation of £18M to Sheffield United, and lead the FA to ban third party ownership.
But third party ownership is still alive and well on the continent. It is most often applied with South American stars making the jump across the Atlantic to Europe. The way it works is that investment groups will purchase the registration rights of an upcoming player. This is sometimes done while the player is at a club, and sometimes as part of a transfer.
For eg. one scenario would be that a 16 year old star in South America would be approached by an agent and asked if he wants backing with marketing and making it big in Europe. These deals usually involve paying the player a better salary, hooking him up with a better agent, better management, sponsorship deals etc. If and when the player agrees, the third party owners will then go to the club he is registered to and negotiate to buy his registration rights - either all of or part of.
The player is then in the hands of the management and third party ownership group, who manage every aspect of his career from that point on. That usually involves paying him a larger salary on top of his club salary, placing him in clubs where he will get more exposure, etc.
The other way third-party ownership happens is that the investment group finances a transfer for a player. For eg. Porto want to sign a player from Brasil but don't have the funds, they would approach an investment group and have them stake 50-60% of the deal in return for the players registration rights.
The investment group make all of this upfront investment with the hope that at some point in the future the player proves himself, becomes a star, and can then exit at a very large valuation.
Some examples: Tevez and Mascherano were placed into West Ham by their investment group as a way of getting them more exposure. It worked out well in both cases as Liverpool purchased Mascherano (buying out the investment group and giving them a good return) and City eventually ended up buying out Tevez - albeit via Manchester United (who never owned the entirety of his transfer rights).
Back to Falcao. He was purchased by a third-party ownership group as part of his transfer to Porto. They bought 55% (likely more) of his transfer rights, supplemented his salary while he was paying at Porto and then moved him to Atletico for the purpose of getting him more exposure (likely with an eye on moving him eventually to Real Madrid). During the time Falcao was there, the investors were supplementing his wages again (infact paying most of them) and working on negotiating his big move which would see them cash out.
Porto's financials show the following for the Falcao transfer:

sale of 60% of the economic rights of the player Bolatti to the entity Natland Financieringsmaatschappij B.V., on July 2009, by the amount of, approximately, 1,500,000 Euro, (transaction perform under the acquisition process of 40% of the registration of Falcao)​

There is another section where it is disclosed that they sold another 5% option in Falcao, and another section where it is disclosed that there is an option for a third party to purchase a further 10%.
The same filing shows that Porto only owned 45% of Hulk.
What is more interesting is who is involved in the Falcao ownership. The group is called Doyen Sports and it was founded by Jorge Mendes (most famous as Ronaldo's agent, but an infamous player agent who is involved in a lot of third-party deals) and Peter Kenyon (former Chelsea chairman).
On their website they have a page for Falcao and you can also see the other players listed. Falcao, like Hulk, ended up in a situation where there was so much invested in him that it would take a lot of money for the investors to see a return (known as being highly leveraged). They were paying his salary for a few seasons, had floated Atleti some money to keep them alive (they got some shirt sponsorship in return) and had made the initial investment when he first transferred.
Falcao ends up moving to Atletico in a 40M move - despite Atleti the previous season stating that they had to clear players out because of their 220M euro tax bill with the Spanish government. What this ended up being is a 20 + 20M deal. 20M never gets paid because its just the third-party owners paying themselves, and of the other 20M only 16M is owed by Atleti, who take an option of paying in two 8M installments (they were late on the first one, to the point of Porto suing). End situation is that around 60% of the rights are with the Doylen group. It also appears that while Falcao was at Atletico that Doylen took an option for a larger stake in him since Atleti were late on their payments. Something weird happen which involved Doylen taking a sponsorship. Either way, they had the majority stake and Atletico had no say or control of the player. For all purposes it was nothing more than a loan with Atletico having a small stake in his registration rights.
The president of Atletico Madrid continuously insisted that they own all the rights to Falcao, but this simply isn't true.
Falcao is on a wage of 10M euro per year, and the return the investors wanted is 60M euro in transfer fee. This narrows down the list of potential clubs that can buy you out to very few. Atletico had no say in where Falcao goes, they had an option in the winter transfer window, but that expired. The owners needed their return and they were going to get it one way or the other.
The list can be narrowed down to PSG, Monaco, Real Madrid, Chelsea and City. City aren't making large investments any longer, PSG have their fix of strikers. Of the remaining three, it is apparent that Real Madrid didn't want to pay up the 60M + 50M in contracts for Falcao (for whatever reason). Apparently Chelsea matched the 60M clause but to pay Falcao the 10M per season in wages would involve a total gross salary of 300k+ per week, which just isn't manageable. Chelsea also have the issue of not being allowed to directly purchase a player from a third-party owner (apparently this is what turned ManU off a move) so it would have required a two-step sale with Falcao going to one club outright and then to Chelsea. Apparently with the David Luiz transfer on the same day he moved to Chelsea Benfica bought out the entirety of his rights from third-party owners (so you can summize that Chelsea gave them the money to buy out that deal so that they could purchase 100% of Luiz directly from Benfica, thus avoiding the third-party rule in England).
With all of these factors you end up with only one target: Monaco. They have the 60M to pay out the investors, they have the funds to pay his wages of 10M per year and better yet they have no income tax so they don't have to supplement the gross.
So in the end Falcao is moved around Europe by his investors with the only goal of making a return for them. He has little to no say in his final destination because of a deal he agreed to years ago while he was still in South America.
More links:

• Do Atletico own Falcao?
• Swiss Ramble on Atletico Madrid and their financial struggles - "one of the worst run clubs in Europe"
• Porto threaten to report Atletico over late Falcao payments
• Monaco eye Falcao move - "Chelsea’s attempts to sign the former Porto man had been complicated by third-party ownership issues"
• BBC: Does third-party ownership benefit or hinder football?
• Quality Sports Investments - another third-party ownership fund that Kenyon and Mendes were involved with

edit part that I missed which some people might not know - Monaco were purchased by Russian billionaire Dmitry Rybolovlev, the 79th richest man in the world. Similar MO to the Al Thani's at PSG except he is investing as an individual, rather than with the backing of a state.

• BBC on the takeover
• His Wikipedia page

When he bought the club in December 2011 they were bottom of the second division in France. He rescued them that season and has now seen them promoted back to Ligue 1.