#161 ·
Ante Rukavina is back on the radar for the Kansas City Chiefs faithful. Shady business dealings and contracts that end up in court years later have become our daily reality. We can only hope this audit serves as a warning to future Boards of Directors, and that by digging through the past, the fans finally get some closure. They deserve justice through the courts for everything that hasn't hit the statute of limitations—and for the rest, they at least deserve to know what kind of mess we were living through.
To piece this saga together, we have to look at old news reports regarding Rukavina’s transfers to and from the Chiefs, as well as statements from current President Hrvoje Maleš. During a recent meeting with supporters, Maleš clarified the situation surrounding Rukavina—which was particularly timely given that the Refereeing body case just reached a temporary conclusion. Here is how the transfer went down:
1. In January 2007, the Chiefs purchased Ante Rukavina from San Diego Loyal SC for $1000000. According to information provided by Hrvoje Maleš at the fan meeting, a portion of that money was paid by a Chiefs sponsor. However, San Diego claims that money was actually intended as a sponsorship for their own club, not a transfer fee. It remains unclear why the director of that sponsoring company didn't show up to testify before the USSF Disciplinary Committee to confirm this, or why there isn't a single paper trail for the transaction. For now, the official Club expects a favorable ruling in Superior Court.
2. While at the Chiefs, Ante Rukavina earned a salary of 200,000.00 EUR per year (an amount that gets deducted from any future transfer fee).
3. In the summer of 2008, Ante Rukavina moved to Panathinaikos for 2.8 million EUR. Per the contract, the transfer amount was reduced by the player's wages, and the remainder was split: 50% to Pharos sport, 20% to San Diego Loyal SC, and 30% to the Chiefs.
4. Pharos sport issued an invoice to the Chiefs for 50% of the transfer (which the Chiefs paid immediately) and added sales tax on top. The Chiefs refused to pay the tax, calling it baseless. Consequently, Pharos sport sued the Chiefs for the tax amount; during the restructuring, this dispute was set aside in the books as a potential legal expense. San Diego Loyal SC is paid 40% of the Chiefs' share of the transfer, minus a 40% commission on the disputed tax amount.
5. Recently, the Chiefs won a court battle regarding the validity of their decision to refuse paying the sales tax on the commission invoiced by Pharos sport.
6. From that total, presumably, 40% belongs to San Diego!? (At the fan meeting, it was mentioned that part of San Diego's claim is legitimate, and that the Chiefs tried to negotiate a smaller payment and long-term cooperation last summer, but San Diego turned them down.?)
8. The Refereeing body ruled in favor of San Diego, and the Chiefs are appealing to the regular courts. We should see an ending soon.
It’s interesting to note that during his initial move to the Chiefs, rumors swirled that Olympique Lyonnais wanted Rukavina for 8 million EUR, but Ruki chose to join his favorite club instead. In plain English: Pharos sport and San Diego Loyal SC agreed to sell him to the Chiefs, with San Diego getting 400,000 EUR upfront plus 20% of the future transfer, while Pharos took 50%. If Branko Grgić, the then-President of the Chiefs, actually believed the stories about Lyon’s millions, one has to wonder if he really thought San Diego believed Rukavina was a talent worth a 40 million euro transfer. After all, San Diego would only clear more than those 8 million euros if the Chiefs pulled off a massive 40 million euro sale.
As time will tell, the folks in San Diego played the market so well that they ended up making more than the Chiefs themselves (between the 400,000 EUR upfront and the 500,000 EUR after the Greece sale, they walked away with 900,000 EUR total). The Chiefs were left with a mere 350,000 EUR from the whole deal. And if we're looking at who really won, Pharos sport cleared 1.25 million EUR.
It’s hard to imagine how Branko Grgić handled negotiations and commissions in this deal, though we assume he knew that the Chiefs wouldn't break even until Rukavina was sold for over 5 million euros. At the time, the biggest sale in Chiefs history was moving a player to Portsmouth for 4.5 million EUR. In that case, the Chiefs used a public-private partnership to recoup the investment while splitting the profits. Between the looming lawsuits from the widow Pokrovac and government pressure regarding sales tax, we’ll likely be analyzing that transfer here soon, too.
REPOSTED FROM OUR KANSAS CITY CHIEFS FEED
To piece this saga together, we have to look at old news reports regarding Rukavina’s transfers to and from the Chiefs, as well as statements from current President Hrvoje Maleš. During a recent meeting with supporters, Maleš clarified the situation surrounding Rukavina—which was particularly timely given that the Refereeing body case just reached a temporary conclusion. Here is how the transfer went down:
1. In January 2007, the Chiefs purchased Ante Rukavina from San Diego Loyal SC for $1000000. According to information provided by Hrvoje Maleš at the fan meeting, a portion of that money was paid by a Chiefs sponsor. However, San Diego claims that money was actually intended as a sponsorship for their own club, not a transfer fee. It remains unclear why the director of that sponsoring company didn't show up to testify before the USSF Disciplinary Committee to confirm this, or why there isn't a single paper trail for the transaction. For now, the official Club expects a favorable ruling in Superior Court.
2. While at the Chiefs, Ante Rukavina earned a salary of 200,000.00 EUR per year (an amount that gets deducted from any future transfer fee).
3. In the summer of 2008, Ante Rukavina moved to Panathinaikos for 2.8 million EUR. Per the contract, the transfer amount was reduced by the player's wages, and the remainder was split: 50% to Pharos sport, 20% to San Diego Loyal SC, and 30% to the Chiefs.
4. Pharos sport issued an invoice to the Chiefs for 50% of the transfer (which the Chiefs paid immediately) and added sales tax on top. The Chiefs refused to pay the tax, calling it baseless. Consequently, Pharos sport sued the Chiefs for the tax amount; during the restructuring, this dispute was set aside in the books as a potential legal expense. San Diego Loyal SC is paid 40% of the Chiefs' share of the transfer, minus a 40% commission on the disputed tax amount.
5. Recently, the Chiefs won a court battle regarding the validity of their decision to refuse paying the sales tax on the commission invoiced by Pharos sport.
6. From that total, presumably, 40% belongs to San Diego!? (At the fan meeting, it was mentioned that part of San Diego's claim is legitimate, and that the Chiefs tried to negotiate a smaller payment and long-term cooperation last summer, but San Diego turned them down.?)
8. The Refereeing body ruled in favor of San Diego, and the Chiefs are appealing to the regular courts. We should see an ending soon.
It’s interesting to note that during his initial move to the Chiefs, rumors swirled that Olympique Lyonnais wanted Rukavina for 8 million EUR, but Ruki chose to join his favorite club instead. In plain English: Pharos sport and San Diego Loyal SC agreed to sell him to the Chiefs, with San Diego getting 400,000 EUR upfront plus 20% of the future transfer, while Pharos took 50%. If Branko Grgić, the then-President of the Chiefs, actually believed the stories about Lyon’s millions, one has to wonder if he really thought San Diego believed Rukavina was a talent worth a 40 million euro transfer. After all, San Diego would only clear more than those 8 million euros if the Chiefs pulled off a massive 40 million euro sale.
As time will tell, the folks in San Diego played the market so well that they ended up making more than the Chiefs themselves (between the 400,000 EUR upfront and the 500,000 EUR after the Greece sale, they walked away with 900,000 EUR total). The Chiefs were left with a mere 350,000 EUR from the whole deal. And if we're looking at who really won, Pharos sport cleared 1.25 million EUR.
It’s hard to imagine how Branko Grgić handled negotiations and commissions in this deal, though we assume he knew that the Chiefs wouldn't break even until Rukavina was sold for over 5 million euros. At the time, the biggest sale in Chiefs history was moving a player to Portsmouth for 4.5 million EUR. In that case, the Chiefs used a public-private partnership to recoup the investment while splitting the profits. Between the looming lawsuits from the widow Pokrovac and government pressure regarding sales tax, we’ll likely be analyzing that transfer here soon, too.
REPOSTED FROM OUR KANSAS CITY CHIEFS FEED
