Co-Ownership: A Tale of Two Clubs

This week was the deadline for co-ownership deals in Serie A. Co-ownership what, you ask? Co-ownership is an anomaly virtually unique to Italian football. While it is practiced in a few South American countries, it has long been important to Lega Calcio. In a nutshell, it is a way for two clubs to split the risks and/or profits on players 50/50. Beyond that, it gets a little more complicated. When a player is owned under a co-ownership deal, two years of his career become a tale of two clubs.

Two shirts, one player, two years

Co-ownership, as the name implies, is when two clubs split the ownership of a player 50/50, usually a young or developing player. They split the cost of ownership, then the decisions are made from there. The player could play for club A, club B, or even be loaned out to yet a third club. Both clubs have a financial interest in the development of the player, so they try to make the best decision for that player. For example, if the player is ready to be a starter for a big club, he will likely play for club A, or the bigger club in the co-ownership. If he might be able to start at a mid-table club, then he might play for club B or another midtable club. If he is still very inexperienced, the two clubs might agree loan him to a lower-table club or a Serie B club. Wherever the player plays for, he is registered with the league at that club and that club is responsible for paying his wages for that season.

To be eligible for co-ownership, the player must have at least two years left on his current contract. Co-ownership only lasts one year (although it can be terminated early,) but can be renewed for one more year for a maximum of two years total. When it is time to renew, the clubs have the option to renew or terminate the deal. Termination can happen by one club buying the other club out (often at a profit.) If a decision cannot be made, then the ownership goes “to the envelopes,” a blind auction system in which each club places a bid for half of the player’s ownership based on their valuation of him and what they are willing to pay in an envelope. The club with the highest bid pays the other club that fee and now owns the club. In the event that no deal is reached, the ownership goes to the club which the player is currently playing for (but that club does not get compensation from the other club, only the player.)

Giacomo Berretta was co-owned w/Genoa, playing for Pavia, and Milan just bought back his other 50%

As if that isn’t confusing enough, co-ownership is actually very complicated. So complicated that even the owners and sporting directors who are very familiar with the process can make mistakes. Players have been lost by clubs who simply filled out the paperwork incorrectly, etc. And it is often unclear for fans as to who owns which players and why they play for yet another club, etc.

But co-ownership is a great way for clubs to gamble on young talent. If the player fails to develop over the two years of co-ownership, then each club splits the bill for their risk. But if the player comes good, then one club has a good player on its hands, and the other club can increase its investment. For example, let’s say Milan and Parma co-owned a player and he turned out to be a starter for Milan. Maybe they each invested €3m initially, but by the end of the deal, they negotiated and agreed that he was valued at €18m. So Milan would buy the other half of the player’s contract from Parma for €9m, triple what Parma paid. And Milan will have only paid €12m for a player worth €18m and still have that player on their roster.

David Speziale was co-owned w/Lecce, playing for Hellas Verona, Milan just bought back his other 50%

Milan have traditionally taken advantage of this practice, and this year has been no exception. Many of the players on co-ownership deals are from Milan’s youth sector. Here are the resolutions of this year’s co-ownership deals via the AC Milan website and @MilanNext on Twitter: (players in bold have played at least one year in Milan’s Youth Sector)

CO-OWNERSHIP DEALS WITH MILAN RENEWED:
- Kevin Constant (co-owned w/Genoa, playing for Milan)
- Riccardo Saponara (co-owned w/Empoli, has been playing for Empoli, will now play for Milan)*
- Gianmario Comi (co-owned w/Torino, will play for Novara)
- Mattia Valoti (co-owned w/Albinoleffe, has been playing for Albinoleffe)
- Lorenzo Saporetti (co-owned w/Cesena, plays in Milan Youth Sector)

CO-OWNERSHIP DEALS WITH OTHER CLUBS RENEWED:
- Simone Calvano (Hellas Verona, on loan to San Marino)
- Alberto Paloschi (Chievo, plays for Chievo)
- Simone Verdi (Torino, will play for Empoli)

- Davide Pacifico (Novara)

NEW CO-OWNERSHIP DEALS:

- Filippo Lora (Cittadella)

- Michelangelo Albertazzi (Hellas Verona)

BOUGHT OUTRIGHT BY MILAN:
- Giacomo Beretta (from Genoa, had been on loan to Pavia)
- Marco Bortoli (from Novara, plays for Milan Primavera)

- Luca Ghiringhelli (from Novara)
- David Speziale (from Lecce, had been playing for Hellas Verona)

BOUGHT OUTRIGHT BY OTHER CLUBS:
- Marco Baldan (Nocerina)
- Alberto Calvetti (Verona)
- Andrea De Vito (Cittadella)
- Andrea Peverelli (Novara)

NO DEAL:
- Wilfred Osuji (goes to Padova)

- Simone Romagnoli (goes to Pescara)

*Parma have reportedly been after Empoli’s half of Saponara. Either team can sell their half of the player at any time, which requires the other team to negotiate with the new club as to where the player will play, etc.

Filippo Lora, this past season's Primavera captain is now co-owned by Cittadella

So Milan have invested in other players, have had other clubs invest in our players, have bought our own youth players back, sold our youth players to other clubs, and let a couple of players go. And even still, some of these deals may be used as bargaining chips to help acquire other players. If you listened to the special Youth Sector podcast a couple of weeks ago with Francesco Battaglia, you’ll remember us talking about how hard it its for so many of the youth players to even play professionally. So you can see that at least for these players, they are getting to play, even if it is for Serie B or other teams.

Two of our most infamous co-ownership deals come from other youth sectors: Kevin Constant, who came from Toulouse in France and we now co-own with Genoa, and Riccardo Saponara, who came from the humble beginnings of Serie D side Ravenna. Constant played for Chievo and then Genoa, at which point last year, Milan bought 50% of his contract from Genoa. Saponara had moved to Serie B side Empoli in January, and in January, Milan bought 50% of his contract but left him at Empoli to finish the season. He will now join Milan this summer and play next season with our first team.

Much is anticipated from Riccardo Saponara, co-owned with Empoli, but playing for Milan this season

Co-ownership encourages the development of young players, even if it complicates everything else. And while it is probably most beneficial to the clubs themselves, allowing them minimal risk and maximum benefit, it probably allows some players to play who wouldn’t otherwise. But I suppose for the players, it’s a bit like having parents who you know are going to get divorced in two years. Or like surrendering two years of your career to a tale of two clubs.

This post inspired by the music of The Strokes