Mario Balotelli's Contract and the Real Reason Liverpool Signed Him from Milan

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Those who have coached, played alongside or worked with Mario Balotelli learn to expect the unexpected. Unexpected is one way to describe how the Italian's latest benighted manager had been talking about him of late.

“We brought in the player to give him a chance, and [we will] give him every chance,” Brendan Rodgers said a week-and-a-half ago. “At this moment, of course, he hasn’t scored the goals we would like or want. ... I'll be working...[on] not just improving him but improving all players. We will see come January what the team needs.”

Giving every chance to a 24-year-old World Cup starter? Working on improving a striker whose contract at AC Milan paid €4 million a season, after taxes?

Assessing a headline signing's future in the same breath as the January transfer window? It is almost as though Rodgers was discussing a footballer brought in on a speculative loan deal rather than the “long-term deal” Liverpool announced after reportedly agreeing to a €20 million transfer from the Serie A club.

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Nothing seemed straightforward about Balotelli's arrival at Anfield. Questioned about Liverpool's interest in the player on August 3, Rodgers said: "I can categorically tell you Mario Balotelli will not be at Liverpool.”

Three weeks later, the striker was part of his squad with Rodgers informing us that “to get someone of that quality in this market is a very good deal for us.”

It was no secret that Liverpool harboured concerns about the player's volatile behaviour and had initially wanted to take him on a loan as a way of—relatively—safely testing troubled waters. Milan refused to countenance such a short-term switch.

Out of Europe after a debilitating eighth-place finish, Milan wanted their money back on an individual Silvio Berlusconi considered “a rotten apple,” according to La Gazzetta dello Sport (h/t the Mirror's Alex Richards). And their owner didn't want to risk such poison returning.

According to sources close to the player and the Serie A club, an alternative transaction was proposed. Milan would sell Balotelli's “economic rights”—essentially the cost of the player's registration—to his agent, Mino Raiola.

Raiola could then “loan” Balotelli to Liverpool for a season for a percentage of the transfer fee, with an option for the Premier League club to make the loan permanent if they were happy with his first season's work. If not, Balotelli would be sold elsewhere with Raiola pocketing the fee.

The structure was intended to reduce Liverpool's exposure on a signing Rodgers himself was to describe as “a calculated gamble.” From Raiola's perspective it would keep a high-profile client on a high salary, move him into the Champions League spotlight and offer significant potential upside on the sale of Balotelli's economic rights if the striker performed as he expected.

Such third-party ownership is commonplace in Spain, Portugal and Eastern Europe. It is used in Italy, where clubs also routinely enter into co-ownership for footballers. The problem is that TPO has been against Premier League rules since 2008.

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Those who know the transfer market well insist there are ways around a TPO ban. The third-party owner could, for example, lend money to a club via an offshore trust, enabling it to purchase the player on a full transfer. As a condition of the loan, however, the player's economic rights would covertly remain with the third party.

During the summer's window, the Premier League delayed high-profile transfers of Eliaquim Mangala, Lazar Markovic and Marco Rojo until it was satisfied third-party interest had been bought out in full.

Yet for all the rigour they apply to enforcing ownership rules, League officials admit they have to take the declarations of member clubs on trust with those clubs aware of the strong sanctions that would ensue if that trust is broken. In Balotelli's case, Liverpool and Milan filed paperwork for a standard transfer, which the League accepted.

There are a couple of explanations for what ultimately happened during the long period Raiola spent with Liverpool concluding the move.

In one, they went ahead with the proposed shadow loan deal, Liverpool's “calculated gamble” including the reduction of their initial outlay on Balotelli. In Fenway Sports Group, after all, they have owners who boasted about reneging on a release clause in Luis Suarez's contract one summer ago and used a medical to try and reduce the terms of an offer to Loic Remy this one.

Liverpool categorically deny that they engaged in any such loan deal, stating that Balotelli was bought directly from Milan. The player signed a three-year contract and accepted a cut in his basic salary to move to Anfield.

In another scenario, Rodgers either changed his mind on a permanent transfer or the voluminous publicity surrounding those negotiations (both Raiola and Milan were actively briefing media that the move was imminent) bounced Liverpool into taking Balotelli on a standard transfer.

This, regardless of the earlier reservations of a "transfer committee" that in Dave Fallows and Barry Hunter includes two former Manchester City employees who had witnessed the havoc the Italian could cause at first hand.

Neither reflects well on the recruitment policy of a club Rodgers claims benefits from the “different vision we have here.”

“At Liverpool there's a strategy behind what we are doing,” he told Sky Sports a month before adding Balotelli to a collection of eight-figure fees for Adam Lallana, Emre Can, Markovic, Dejan Lovren, Divock Origi and Alberto Moreno.

Like Super Mario, it's become a hard strategy to have faith in.

Duncan Castles writes for the Sunday Times, Sports Illustrated, UEFA Champions magazine and others. A respected figure with an inside track, he has built a reputation for breaking transfer stories.