Football's Secret Trade. Panja Tariq

both of them, but neither returned our emails and letters. Between them they had been directors of more than 230 companies in Europe over the previous decade, making it likely that they were so-called nominee directors.

      Such officials are hired, quite legally, for a few hundred pounds a year to sign off on company accounts. “You can form a company to do a deal, say one football transfer, and then get rid of it almost straight away and never put any information on public record,” Richard Murphy, a tax expert based in Norfolk, England, told us.

      We would find out that a series of UK companies had been used to finance football transfers of players over the last 15 years. There were many more such entities around the world: in Panama, Gibraltar, Malta, Luxembourg, Jersey and the British Virgin Islands, to name a few.

      Acquiring the transfer rights of players was completely within FIFA's rules at the time we started investigating the practice. It had taken hold in the 1980s in South America, where clubs received finance in return for a share in the future transfer fees of young players. FIFA had long had a laissez-faire attitude to these arrangements, provided the financiers did not take control of the careers of players. We realized that these arrangements were becoming more common in Europe with the financial crisis that took hold in 2008 as high-street banks pared back lending to many clubs.

      Aside from Porto, another team that had turned to private lenders was Atlético Madrid, which had been caught short by the credit crunch. Atlético was desperately trying to keep pace with Real Madrid and Barcelona, the world's biggest teams by revenue.

      Finding information about these alternative finance deals was tricky. The transfer market is cloaked in secrecy, largely because clubs do not want their rivals to know what they are spending on fees. It's rare for fees to be disclosed, and less common still for club executives to discuss with reporters how they are financing the fees. Jochen Lösch, a German sports executive in São Paulo who helped run a fund that invested in the transfer rights of players, gave us his take on the new arrangements that were replacing traditional bank loans.

      He said that they were already deeply entrenched in South America and parts of Europe. “It's a bit like reading The Sun newspaper” he said, referring to the UK tabloid newspaper known for celebrity gossip. “Everyone does it but nobody admits it.” The investors did not want to be in the media spotlight that football brings. Lenders were also wary about their relationship with clubs entering the public domain.

      Spanish high-street bank Bankia's partnership with Valencia football club was a case in point. Bankia's public relations department went on high alert in 2012 when the club teetered on the brink of insolvency while owing the lender 200 million euros. Having traded its best players for €95 million, the only major asset Valencia had left was its creaking Mestalla Stadium. Imagine the public backlash if Bankia had called in its debt and forced the club to sell its home.

      Eventually, some club executives and lenders agreed to talk to us. They said that these private lending agreements were necessary during the credit crunch because banks had stepped back from football. The arrangements were a kind of financial hedge that allowed them to share the cost to sign players. In most other parts of the world it was a legitimate form of financing, and had been approved by stock-market regulators in Argentina and Portugal. The Spanish and Portuguese leagues endorsed the practice, as their teams were ravaged by financial meltdown.

      A former English footballer in this business gave us a window into this secretive world. On a rainy day, he showed us into his ninth-floor modern office among Manchester's neo-Gothic spires. He introduced us to a sports science graduate. On his computer, the young man pulled up an eight-page file that focused on Luciano Narsingh, a winger who was born in Amsterdam.

      Narsingh was coached at the Ajax youth academy that produced Johan Cruyff and Dennis Bergkamp. He did not make it into the first team, because weighing barely 60 kilos he was deemed too fragile. Now playing at PSV Eindhoven, he was starting to show that Ajax might have made a mistake in discarding him.

      According to Smith's data, Narsingh was rated fourth of 80 wingers in the Dutch league, with a 69.9 % score based on a variety of information such as the number of his passes that had led to a goal. That ranking made the grandson of Indian immigrants to Amsterdam a possible investment opportunity.

      “This is fantasy football on steroids,” explained the former player. “We are not trying to find the next star kicking a tennis ball around in São Paulo. We are higher up the food chain.” He said that he had invested about $50 million on behalf of investors and was in discussions with a pair of quantitative analysts who have worked for Microsoft and Vodafone to come up with an algorithm to identify the players whose value was most likely to increase.

      Betting on transfer fees was a potentially risky bet. The careers of young players can often come to nothing, through injury or just because they turn out not to be as good as people once thought they were. Only a fraction – typically less than 20 % – of 16-year-olds in a club's youth team actually make it to the first-team squad.

      For investors willing to take this risk, there were different variations on the same model. Sometimes they would buy stakes in players directly from a club. On other occasions they were passive investors who would put money into a transfer market fund like the one managed out of Manchester. A few times, wealthy individuals might even go as far as buying a small club for the purpose of speculating on the transfer market.

      All these methods were legal. FIFA's regulations on the subject were distilled into two sentences in a sub-clause of the game's 39-page transfer rules. They said that the world ruling body has the right to sanction any club that allows a third party to interfere in player transfers. Otherwise, it did not have a problem with the practice: it did not publicly accuse or sanction any club for breaking the rule between 2008 and 2015.

      Behind the scenes, we discovered investors who were speculating on the transfer boom, including oligarchs who had once been close to Abramovich and friends of the former Portuguese Prime Minister José Sócrates. Others included a British racehorse owner and a commodity magnate who normally traded not in athletes but in diamonds, gold and pharmaceuticals.

      In South America, where the practice was most widespread, there were even people with ordinary jobs, such as waiters and taxi drivers, who had taken stakes in the careers of players.

      We found investors who had profited from acquiring a stake in the future fees of star players including Cristiano Ronaldo, Neymar and James Rodriguez. Betting on that trio, we calculate, they netted a total of €15 million.

      On the stairs of European ruling body UEFA's cavernous glass headquarters overlooking Lake Geneva, we told its then general secretary Gianni Infantino how companies in the UK whose ownership structure was not publicly available were being used to finance transfers. As we explained, Infantino frowned. “It should not be like this,” he said. Even if the agreements were legal and there was no suggestion of any foul play, the Swiss-Italian said the source of the finance should be clear to make sure the integrity of football was not at risk.

      Only a few years earlier, in 2007, a scandal shook the Premier League when an offshore company controlled by oligarchs engineered control over the careers of Argentine players Carlos Tevez and Javier Mascherano when they joined West Ham. The fallout took months to clear up and led to a ban on investors acquiring the transfer rights of players in the English championship.

      Infantino went looking for more information about the companies bankrolling the booming transfer market during the financial crisis. He told UEFA president Michel Platini, who said he was horrified to learn that so many footballers in Europe were being used as a type of financial product, often without their knowledge.

      The former English footballer in Manchester, who now ran an investment fund, told us that clubs were merely raising money against their assets, like other businesses. The career of players was not affected, he said.

      Infantino's enquiries gathered pace like a “snowball”, he later told us, growing as the size of the industry emerged. By 2013, investors owned stakes in the transfer rights of 1,100 players in Europe worth $1.5 billion, according to KPMG, a financial consultancy.

      Over the next two years, Platini put pressure on FIFA president Sepp Blatter to ban the practice and on 1 May 2015, it