Joaquim Piera, Sport.es May 20, 2013
The ownership of Neymar is quite puzzling. It presents as a good case to see how transfer in football world could be just like a merge and acquisition in business.
According to the report, the current ownership of the player could divide into 3 parts: Santos(55%), DIS(40%) and TEISA(5%).
The price what FCB is negotiating now is the 55% ownership from Santos, yet the other two parties might balk at the deal.
The initial offer to Santos is 17m, now 23m, is then rejected.
Ownership split:
In this news (O GLOBO, Feb. 18, 2009), we could take a peak how Neymar has been valued in football world. Back then, the ownership is rather simple. Santos has 60% and Neymar's family has 40%. Neymar started to receive offers from European clubs and pending his renewal with Santos. DIS, a investment company which support the Santos board, offers the deal to buy the 40% from Neymar's family in exchange of his renewal.
a.) Chelsea in 2009
They made an offer of R$6m (O Globo article), back then it is approximately €2.25m
b.) DIS and Neymar Family:
(Written in 2013) Neymar's family agreed to sell the ownership to DIS, which holds currently the 40% of the interest. The cost of deal for DIS is unknown, yet it should not be less than what Chelsea intended to offer. (So, let's say the lower bound is €2.25m)
UPDATED：Sambafoot.com (May 7th, 2016) N&N says investment group DIS are trying to harm the image of Neymar
Here comes the deal, from official lawyer announcement, it was R$5m (given the EURBRL rate, this amount roughly equals to €1.66m)
c.) Santos, TEISA and Chelsea in 2010： In November 2010, Santos transferred 5% of the economic rights to TEISA (The Link no longer available), the value is R$3.5m, in equivalent to €1.5m. At that moment, Chelsea made another offer around €25m-30m, which matches the value of such 5% transfer.( €1.5m/5%= €30m)
Valuation: How Neymar to be valued as a whole?
Given the complexity of his economic rights, how we might assess his value given such structure?
Here comes the Table.
a.) Valuation of Neymar at €50m
This is probably the price Santos having in mind. That's say, if the transfer fee for Santos is €23m, Neymar in total is valued at €42m.
They reject, so, let's say they eye for something higher.
b.) The value of DIS's share has increased significantly
Based on €50m valuation, DIS might claim a "buyout" fee for 40% of economic right: which is roughly €16.7m (642% return over 3 years!!!)
They do have an option not to exercise this profit. They could choose to hold on, and benefit on Neymar's further economic benefits.
For example: If they keep holding on 40% of "Ownership of Economic Benefits", every EURO Neymar made in the future, they got 40 cents.
c.) Comparison:
This is a question for the Club, or the fans who would like to choose side on this deal. Is Neymar really matching the height of Villa or Ibrahimovic?
DIS and TIESA: Bet on Neymar's Future?
Although Brazil is a good market, European football is still the global spotlight. If Neymar could transfer to any European clubs, DIS and TIESA would be better off by such global presence. Think of the sponsorship and all economic benefits they could share, given their ownership percentage unchanged, the player could generate more profits for their investment.
Although DIS has a rather close relationship with the board of Santos, I do not think they are with Santos this time. The ownership of Santos on Neymar is subject to the current contract terms, which will end in 2014 summer. If Santos doesn't cash in for this round, they would lose a lot.
However, DIS, I suppose, has its 40% ownership without an expiration date. They would be keen to see Neymar to earn higher salary and sign more sponsorship deals when he arrives in Europe. In that sense, DIS and TIESA might be more inclined to support (any) European club than Santos.
Leave him alone ? or Bring it on?
As I am writing this article, here comes the information on Sport.es that Barcelona would stick to its offer on Wednesday.
FCB now really has a better end of bargaining stick, as I noted that Santos has the pressure to liquidate the position right now, if DIS is not supporting their position. FCB could be wait and see, as long as they could keep DIS alongside with them.
However, whether this deal is worth doing is another question. For me, FCB must see some commercial benefits than I could not see here to offer such price. Even stick with the €23m for Santos, the total valuation of this player is still extremely high.
Lots of questions remain. Could he fit in the squad? Could he prove himself to compete in European football? What's his growth potential in the future? And, even he could grow as a brilliant star, Could the football market in Europe support a price higher than €42m (in total for 100% of his rights) to be profitable??
We will see.
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