SAO PAULO, July 27 The transfer fee Chelsea paid for Brazilian Oscar will not all go to his former club Internacional, an example of how the controversial practice of third-party ownership has taken hold in Brazil.
The fee, which media have estimated at 25 million pounds ($39.29 million), will instead be divided up between two Brazilian teams, the midfielder himself and the entrepreneurs who own what are called his "economic rights."
The London side completed Oscar's signing on Wednesday and the 20-year-old playmaker is expected to join Frank Lampard, John Terry, Fernando Torres and the rest of his new team mates when his Olympic duties with Brazil end next month.
The transfer fee is one of the highest ever paid to a Brazilian club following the more than 21 million pounds Sao Paulo received from Real Betis for Denilson in 1998.
It involves financial payments that are commonplace in Brazil but unusual in Europe, where transfer fees normally go directly from one club to another.
In Brazil and some other South American nations, players have two parallel deals, one for their playing rights and another for their economic rights.
The first stipulates which team the player plays for, the second who gets what if the player is transferred.
In addition to their clubs, companies, investment funds, the players and their agents can all hold a stake in a player's economic rights.
In doing so, they are investing in the player -- usually when he is young -- in the hope of making a profit if he is eventually sold for a big transfer fee.
"The easiest way to understand it is to think of football as you do the stock market, where the players are stocks," said Fabio Buratta, a businessman who has shares in Brazilian players.
"If I think that a young player is promising, I pay the club, say, 50 percent of what they think he is worth and in the future I will get 50 percent of whatever fee he commands. The risk is that the player doesn't make it and I lose my money."
In Oscar's case, 25 percent of his economic rights were held by himself and 25 percent by his agent, according to Internacional. The other 50 percent belonged to the club.
That means half of Chelsea's transfer fee will go to Internacional, with the rest divided between the player and his agent. A small part of Inter's fee will go to Oscar's first club Sao Paulo under a separate sell-on clause.
Third-party ownership gathered strength in the middle of the last decade when impoverished Brazilian clubs realised they could hold on to an important player as well as secure a quick cash injection by selling a percentage of his contract.
Investors, including executives at two big supermarket chains, formed companies to buy and sell players knowing that one big sale could guarantee a significant return.
The only potential problem were regulations that only allowed clubs to buy and sell players.
World soccer governing body FIFA banned third-party ownership in 2008 after English football was hit by the controversial arrival of Carlos Tevez and Javier Mascherano, the two Argentine players who left Brazilian club Corinthians to sign for West Ham.
It was revealed that West Ham did not own the players' contracts and after investigations and court cases the London club was fined £5.5 million.
Brazilian investors get around the rule by signing players for small, sometimes specially created clubs, and then handing them over to bigger sides.
They claim such deals are no different from loan deals in Europe, where a big club buys a young player and immediately farms him out to a smaller club to give him experience.
"Chelsea has bought several players who have never played for Chelsea," said Federico Pena, director of football at Traffic, a sports marketing company that is one of the leading investors in Brazilian players.
FIFA said it relaxed rules in 2010 so they do "not prohibit pure investment tools as such."
In an email response to questions, FIFA said that investment of a third party is now only illegitimate if and when the "third party has the right to influence the club's choices in employment and transfer-related matters."
Officials at Internacional said they did not want Oscar to leave. However, they also acknowledge a club alone rarely decides when a player will be sold.
Football teams worldwide find it tough to hold on to a player who wants a transfer. But in Brazil outside parties who own all or part of a player's economic rights can clearly influence that decision if an attractive offer is on the table.
Whatever the case, Pena said the practice has spread and that it is now common in Argentina and even in Portugal.
It has become less popular in Brazil recent years as cash-strapped European clubs suffer from economic woes and Brazilian teams expand their revenue streams as the country's economy grows and more people join the consuming classes.
($1 = 0.6364 British pounds) (Editing by Simon Evans)