Estudiantes de La Plata’s project to develop with external investment took a hard blow over the weekend. 

Club president Juan Sebastián Verón found himself in hot water last week when Argentine Football Association (AFA) treasurer Pablo Toviggino accused him of lying to the club’s members about a multimillion-dollar investment deal from U.S. business magnate Foster Gillett. The terms of the deal have been jealously guarded.

Then, on Sunday, Boca Juniors informed the Argentine Football Association (AFA) that it had received the payment to activate midfielder Cristian Medina’s contract release clause — but the money had come from Gillett’s personal account.

FIFA regulations on player transfers prohibit clubs and players from doing deals with third parties that involve them making payments for player transfers.

Medina was Estudiantes’ flagship signing for the season. He was announced by Verón under the tag “Estudiant(es) Revolución” [Estudiantes (is a) Revolution]. 

AFA will now investigate the complaint. If it confirms that the funds came from Gillett’s account, the transfer will be declared void. Medina would have to take the case to court if he wished to overturn the decision.

According to sporting law expert José Emilio Jozami, Estudiantes could face economic and sporting sanctions if it’s found to have induced the termination of the contract, as per FIFA’s rules.

Contacted for comment by the Herald, Verón said the situation is an arrangement between the player and Boca, and that Estudiantes is not involved in the matter.

‘Estudiantes will become a SAD’

The news of Medina’s transfer controversy came at the worst possible time for the La Plata club. On Saturday, President Javier Milei said in an interview with Radio Mitre that the club would soon become a private sports corporation (SAD by its Spanish initials).

“Estudiantes is on the road to becoming a SAD. That’ll be a benefit for all its members and fans,” said Milei.

He went on to laud Verón’s brilliance, not just as a former footballer but as a director, saying he’s “incredibly intelligent” and that Estudiantes is lucky to have him.

This echoes comments by Gillett’s partner in Argentina, Guillermo Tofoni. “SADs are moving forward steadily in Argentine football,” he wrote on Instagram on Friday. He added that the management model “looks to establish itself at Estudiantes de La Plata with Foster Gillett and Juan Sebastián Verón.”

He added the U.S. businessman’s investment looks to “consolidate the club as a reference of the SAD model in the region.” Tofoni said the deal was for US$150 million. Argentine media have previously placed that figure at US$120 million.

Both comments were rejected by Verón, who has always insisted the investment comes with no strings attached, and will not require a switch away from the member-owned, non-profit civil association model required by Argentine law.

“Estudiantes won’t be an SAD,” he said during a recent streaming session. “As the board of directors, we set on that from the beginning.”

He went on to say that fans should “understand the game” when it comes to Milei’s statements, and that Estudiantes would use the new legal framework without abandoning its current status.

He has said that clubs can partner investors by creating parallel companies in which both are stakeholders, and that the club would only intervene when assets were at risk. However, the specifics of how such a setup would work remain unclear, since the sporting corporation model is a new proposal in Argentina.

“The non-profit civil association will stay on the sideline and reabsorb the footballing structure in case things go wrong,” he said. “The club won’t disappear, as has happened elsewhere. We have to lose the fear of what could happen [with this deal].”