Accuracy • Independence • Integrity

October 25, 2016   |   Ithaca, NY

BlogsParking the Bus

The Good Kind of Loans

Tuesday’s UEFA Champions League semi-final first leg between soccer clubs Chelsea and Atlético Madrid featured a sight unfamiliar to most American sports fans.  And no, this goes beyond the United States’ hesitance to embrace “The Beautiful Game.”

Despite being under contract for Chelsea, goalie Thibaut Courtois started this game – as he has for the last three years – in front of Atlético Madrid’s net.  Hardly an undercover agent for the London club, rather Courtois’ contract was loaned to the Spanish side, as Chelsea already a solid keeper in Petr Cech.

The 0-0 semi-final draw in Madrid illustrated a rare occurrence within an interesting nuance of European club sports, where trading players, as seen in North American leagues, is rare.  Instead, teams generally negotiate transfer fees for players, essentially bargaining (and paying excessive amounts) for the rights of a player’s contract.

Another characteristic of this system is player loans.  Very often, teams with players who they do not foresee obtaining significant playing time in the near future may loan the contract of the player to another club (for weeks to years), while remaining under contract for their original club.  For example, in this case Chelsea knew that Courtois would hardly see any playing time when they signed him as a 19-year-old in 2011 with Cech still in top form.  However, the club wished to fulfill two objectives: keep Courtois under contract for Chelsea and give the young keeper playing time to develop for when Cech begins to decline or gets injured.

An added bonus, Atlético Madrid would pay Courtois’ wages in exchange.  Atlético get a talented player; Chelsea get free development of a talented prospect.  Win-win.

However, Chelsea executives never anticipated having to actually play matches against Courtois, having shipped him to La Liga.  That is until they were drawn to play two home-away legs against the Spanish side in the Champions League.

Under British domestic rules, players out on loan are prohibited from playing against the teams that own their contract out of potential conflicts of interest. However, there are no such restrictions enforced by UEFA, the governing body of international European competition.  Courtois could now potentially impede his “real” club from advancing to the Champions League Final.

Despite this bizarre situation, Chelsea and Courtois’ circumstances made me reflect on the potential effects of implementing the loan system in North American sports.  Think how this could change how teams would manage their rosters.

For instance, what if upon drafting Andrew Luck, the Indianapolis Colts elected to keep Peyton Manning for a few more (retrospectively productive) years and loaned Luck out to a struggling team without a quarterback to get NFL experience.

Of course, in real life, the Colts released Manning so that they could both sign Luck and get him immediate experience (while Peyton went on to break NFL offensive records for the Denver Broncos).  In the loan system, those two interests aren’t necessarily mutually exclusive with keeping Manning.  The same scenario could be played out in countless other situations across other top American sports, with the exception of baseball which has an expansive minor league system.  The MLS has actually already instituted an intra-league loan system.

Of course, the difficulties come when the loaned player has to compete against his team, especially if it were to occur in the playoffs.  And unlike in international club soccer, there aren’t three or four separate international leagues that all play at a – roughly – equally high level in football, basketball or baseball, so the chances of the awkward Chelsea-Courtois situation would be far more likely in North American pro sports.

Nonetheless, any chance to learn or improve our domestic sports leagues through examples from abroad should always be considered.  The loan system – in spite of its potential for rare peculiarities – offers one such case in point.