Investigative series takes close look at football clubs

In the first episode, aired on March 2, our journalists sought answers to the question why football clubs continue to be part of political spoils, despite promises that this practice would be discontinued.

Another issue the program looked at are ways in which clubs whose accounts have been blocked conduct their business.

The clubs' management boards are still part of the political spoils of the ruling parties, just as is the case with public companies. A lack of control of the money that flows into clubs that are formally sports associations, neither private nor state-owned, allows for numerous abuses, but relevant institutions do not deal even with obvious violations of the law - effectively granting Red Star (Crvena Zvezda) and Partizan football clubs a special status.

The Serbian citizens's money has for years gone, through sponsorship contracts with state companies, to Red Star and Partizan, while accounts of these clubs remain blocked because they owe taxes, electricity and other bills to that self same state. Although bypassing blocked bank accounts is illegal, the two clubs, according to the findings of our reporters, are operating without problems - which practically means that the state participates in a case of fraud carried out at its own expense.

Given that, at least according to official information, no investigation has been launched, it is unknown how the two clubs managed to function while under blockade. However, according to the Reporter investigation, this would be possible in several ways.

One of the mechanisms that could be applied to Red Star and Partizan are business operations carried out through subsidiaries - both clubs have at least three such firms.

All this is happening while representatives of Serbia's ruling parties sit on clubs' boards. This is the case now as well as during previous governments despite the promise of PM Aleksandar Vucic, who heads the strongest party in the government, that this practice would end.

In addition to party officials, members of Red Star's board include even persons facing legal proceedings.

The new management Partizan was appointed in December 2014 and includes people generally close to the SNS. According to UEFA's Statute, a football association may be suspended if state authorities interfere in its work such that it can no longer be held responsible for organizing football activities in its territory.

Despite this, the Serbian Football Association (FSS) did not react when in 2012 Vucic, then first deputy prime minister, appointed Red Star's new management mostly made up of party personnel.

Board members have a huge influence on everything that happens in the club. According to the clubs' statutes they are in charge of finances, make final decisions on sporting matters, and among other things, on new signings and selling of players.

Although player transfers represent the biggest source of income for Serbia's clubs, these transactions, B92 TV reporters have found, are still carried out without adequate checks in place.

Red Star board representatives refused to answer why a large number of players were allowed to leave before their contracts expired, and without any compensation for the club.

B92 TV's Insajder investigative program reported back in 2008 that allowing players to leave without compensation created room for abuse. It was for these practices that Obilic FC Director and folk star Svetlana Raznatovic was later put on trial and found guilty.

Namely, board members who support such moves are in a position to receive percentage from players' future earnings, or from their managers. These transactions take place in a narrow circle of people, and mean that the club of origin loses millions of euros, while the state budget is left without the money that would have been paid by clubs profiting through transfer compensation.

The FSS believes that the main problem when it comes to player transfers is the fact it is "unknown" who actually owns their contracts.

Not only is it unknown where all the money goes, but it is also not known who is, and at what point in time, entitled to compensation. According to the FSS, pressed for money, clubs trade their right to transfer income even before a player has been sold. Clubs effectively sell players to investment funds for a lower price than that achieved in the subsequent transfer. Club administrations decide on all these issues. The most controversial point here is that ownership of these investment funds is never fully disclosed.

Reporter's journalists tried for weeks to get Serbia's two leading clubs to provide answers about transfers, ways in which they do their business, and sponsorships of state enterprises. Their arrogant refusal to answer these questions indicates that both Red Star and Partizan and their leaderships are practically above the law.

However, when the new program was announced, the clubs reacted by publishing statements on their websites. Red Star's management thus effectively called for lynching our journalists. The board invited fans to come in large numbers to an upcoming game, support the players, "and publicly show what they think about Red Star after B92 TV attempted to bring down the club."

Partizan's statement issued before the first episode of Reporter even aired and before its contents were seen publicly, said it "demonized Serbian football and damages the entire Serbian society."